That the seaway is not necessary to transport iron ore from foreign countries to eastern steel mills is also clearly indicated by an analysis of the existing transportation facilities and the costs of transportation.

Eastern steel mills are located primarily in two areas--those along the Atlantic seaboard and those located at interior points, such as Pittsburgh. To mills located along the seaboard, imported ore, whether from Labrador, Venezuela or African or European sources, can most economically move direct by ocean vessels. To interior points such as Pittsburgh, imported ore can be transported more economically by ocean vessels to Atlantic seaboard ports and then by rail to the interior steel mills via Montreal and the St. Lawrence seaway. From Venezuela, the iron ore would move in ocean vessels to Baltimore and thence by rail to Pittsburgh. The cost of the movement of ore via Montreal and the St. Lawrence seaway would be $1.94 per ton greater than via the Baltimore route. On ore moving from Labrador, the cost via the St. Lawrence seaway would be 14 cents per ton higher than via the port of Baltimore.

Oceangoing ore vessels from Venezuela, Labrador, or elsewhere could not traverse the proposed St. Lawrence seaway as the proposed depth of the seaway is only 27 feet, and oceangoing ore vessels have a draft of 34 feet and more. It would, therefore, be necessary to transfer ore from ocean vessels to lake vessels at Montreal, even if the 27-foot proposed seaway is built.

A practical indication of the fact that imported ore will not move to inland points via the seaway, but will move via rail, is indicated by the construction now going forward to handle ore at eastern ports. The Baltimore & Ohio Railroad has completed large dock facilities for the handling of iron ore from ship to rail. These facilities are located adjacent to coal piers where coal shipped from mines in Pennsylvania, Ohio, and West Virginia to tidewater are unloaded. The Pennsylvania Railroad has announced the building of a modern iron ore unloading pier on the Delaware River in Philadelphia. The new facilities will cost approximately $8 million and have a rated capacity of 2,400 tons an hour. It is planned to complete the new pier in the summer of 1953. These facilities will also be located adjacent to coal unloading docks in Philadelphia. A supply of empty coal cars will be available for the movement of ore from these ports to interior points. Not only is this movement more economical, but it will also result in a more efficient use of present rail transportation facilities. Present transportation facilities are adequate to transport iron ore from the boats to the interior steel mills and the construction of the seaway is not needed for this purpose.

SEAWAY NOT NEEDED FOR CONSTRUCTION AND REPAIR OF OCEANGOING SHIPS The second point urged for construction of the seaway is that it is necessary to permit the building and repairing of oceangoing ships by Great Lakes shipbuilding plants. Strongly urging these views are Secretary of State Acheson, former Secretary of Defense Marshall, Secretary of Defense Robert A. Lovett and John D. Small, Chairman, Munitions Board.

Vice

Numerous authorities, however, take a contrary view. Capt. Willis W. Bradley, United States Navy, retired, emphasizes the adequacy of seaboard shipbuilding and repair facilities. Vice Adm. Edward L. Cochrane expressed the same view, and also stressed the importance of the Great Lakes shipbuilding facilities for the construction of ore carriers and other Lake vessels, and for the construction of smaller boats needed in large numbers in time of war. Adm. Russell Wilson also stated that the Great Lakes shipyards built 510 small vessels up to and including escort vessels and submarines during the last war. Any additional capacities which such shipyards may have could be used for similar purposes since the number of vessels constructed represented only 121⁄2 percent of the total number of these types of vessels built during World War II. Vessels constructed with facilities on the Great Lakes can now be moved to tidewater by way of the existing 14-foot St. Lawrence channel or, by the use of pontoons, can be floated to the Gulf of Mexico by way of the Mississippi River system.

While there is some conflict in the testimony presented to the House committee as to the desirability of using Great Lakes facilities for constructing and repairing oceangoing vessels, when all factors are considered there appears to be no strong case made for the construction of the seaway for this purpose.

It is important to bear in mind at all times the question of whether or not the seaway can be kept open in time of war. If not, it would constitute a trap for vessels being built or repaired in the Great Lakes. Capt. Willis W. Bradley, in commenting on this point stated that "the Great Lakes area has become one

of our most exposed frontiers, and any idea that the national security can be enhanced by increasing the density of shipbuilding facilities therein, at the expense of less-exposed regions, should be abandoned as without foundation in fact."

Of fundamental importance to the use of the seaway for national defense, or in time of war, is its availability at all times and its defendability against military attack. First, the seaway will require approximately 5 years for its construction; therefore, we must postpone for this length of time any use of the seaway. Second, ice conditions would prevent the movement of vessels through the seaway for approximately 5 months of each year. Even if the seaway were necessary for the movement of iron ore, or for the construction or repair of oceangoing vessels, it would be available for only 7 months out of each year. During the remainder of the year, existing transportation facilities would be called upon to transport iron ore, and any ocean vessels undergoing construction or repair at Great Lakes shipbuilding plants would be bottled up until the spring of the year when the seaway is opened to navigation. Third is the consideration of the important question of whether the seaway can be defended against air attack or sabotage. This question seems to be clearly answered by Gen. Hoyt S. Vandenberg, in an article appearing in the February 17, 1951, issue of the Saturday Evening Post, wherein he states:

"Even if we had many more interceptor planes and antiaircraft guns and a radar screen that blanketed all approaches to our boundaries, a predictable 70 percent of the enemy's planes would penetrate our defenses despite the extraordinary valor and skill of our pilots.

"The bleak and blunt evidence of the last war proved conclusively that no bombing attack mounted in sufficient strength by the Americans, British, or Germans ever was turned back by the most strenuous defensive action. The offense always has had a crushing advantage in aerial warfare, and there is no prospect that the balance will change in the foreseeable future."

Other authorities making similar statements in their appearances before the House Committee on Public Works in 1951 were Col. James H. Stratton, Maj. Gen. Follette Bradley, United States Army, retired; and Vice Adm. Gerald F. Bogan, United States Navy, retired. In the light of such overwhelming testimony concerning the seaway's vulnerability to enemy air attack and sabotage the conclusion must be drawn that the proposed seaway would not be an effective military asset. On the other hand, it would require a major military force to attempt to protect it.

Since the seaway could only be used for 7 months out of the year, and since it cannot be defended successfully against determined enemy air attack or sabotage, there is raised the grave question of whether or not the necessary manpower and material needed for its construction should be diverted from other vital defense production activities. The construction of the seaway at this time would be an added expenditure of public funds and an added inflationary force detrimental to the national interest. The use of manpower and material would be in direct competition with other defense projects. Such manpower and material are currently needed for the construction of other transportation facilities such as highways, railroad locomotives, freight cars, motortrucks, barges, and airplanes. These are all needed to maintain an adequate national transportation system. Unless it can be clearly shown that the seaway is necessary to our national defense, manpower and material should not be utilized at this time for its construction.

THE POWER PHASE OF THE PROJECT

The third argument urged for construction of the project is that it is necessary to supply an alleged power deficiency in the northeastern part of the United States.

If it should appear desirable to develop the power phase of the project, it could be undertaken without the necessity of proceeding with the construction of the seaway. The power facilities can be built independently of the seaway and without impairing future seaway possibilities in any way. While the Federal Power Commission has rejected an application of the State of New York to proceed with the construction of power facilities, it was not rejected because of the inability to proceed separately with the power project, but because the Power Commission believed that the seaway and power project should be constructed at the same time.

It would appear, however, from evidence presented to the House Committee on Public Works that the amount of power to be generated by the St. Lawrence

project would just about equal the increase in electrical energy requirements for a single year. It would require 5 years for its completion and in the meantime private interests are planning the construction within the next 2 years of facilities which will, for the whole Northeast, be equivalent to seven times the St. Lawrence capacity.

Mon C. Wallgren, Chairman of the Federal Power Commission, stated that the St. Lawrence project would produce 1,881,000 kilowatts to be divided equally between the United States and Canada, and that the demands for electrical energy within the New York, New England, New Jersey, and Pennsylvania area were estimated at $50,000 kilowatts per year for at least a decade.

It is apparent that the power phase of the St. Lawrence project would, so far as the United States is concerned, make a relatively minor addition to the power developments urged and planned under private management; that it would not be available for at least 5 years; and that it could be developed without the construction of the seaway.

CONCLUSIONS ON THE IMMEDIATE CONSTRUCTION OF THE ST. LAWRENCE PROJECT AS AN INSTRUMENT OF NATIONAL DEFENSE

The foregoing evidence clearly justifies the conclusion that the present construction of the St. Lawrence seaway and power project is not desirable from the point of view of national defense. The seaway is not needed for the transportation of iron ore to Great Lakes steel mills; it is not needed to transport iron ore to interior eastern steel mills; it is not needed to construct or repair oceangoing vessels in Great Lakes shipbuilding plants. Moreover, it could at best be available for only 7 months of the year and there is overwhelming evidence that it could not be effectively defended against enemy air attack or sabotage. Finally, the use of manpower and materials for the construction of the seaway at this time would add strongly and uselessly to the forces of inflation through the bidding for those resources against their use in meeting military requirements and the demands of the civilian economy. Such use would be detrimental to our national defense efforts. The St. Lawrence seaway and power project should not be undertaken at this time as a means of national defense.

CONSTRUCTION OF THE SEAWAY AS A PEACETIME TRANSPORTATION FACILITY

Having examined the proposed St. Lawrence seaway and power project from the standpoint of national defense, we will now consider the question of its value and justification as a transportation facility under peacetime conditions.

Under Senate Joint Resolution 27, it is proposed that the new deep-water navigation works on the St. Lawrence River be made self-liquidating by charging reasonable tolls on cargoes and passengers. The resolution does not contemplate that the entire seaway and power project be made self-liquidating through the assessment of tolls, but only that portion represented by the navigation works on the St. Lawrence River. The resolution further provides, under section 3, that, during the period of construction, the President is authorized and directed to negotiate a further argeement with the Government of Canada under the provisions of the Boundary Waters Treaty of 1909 defining the rates of charges or tolls to be levied on cargo and passenger traffic, using the new deep-water navigation facilities on the St. Lawrence River. It further provides that tolls shall vary according to the character of cargo so that each classification will, so far as practicable, derive relative benefits from the use of the facilities, and in no event shall the total charges exceed the equivalent of $1.25 per ton of laden cargo.

According to testimony by the Chief of Engineers of the United States Army, the Governments of Canada and the United States have expended, to date, a total of $164,112,000. Of this amount Canada has spent $132,370,000.

Since tolls are to be assessed only on the "new deep-water navigation works on the St. Lawrence River" it may be exceedingly difficult to work out an agreement as to the amount of such tolls which are to be credited to Canada and the amount to be credited to the United States. If toll revenues are to be divided in relation to the cost to each country of the new work on the St. Lawrence River to be liquidated, the United States would receive a much greater proportion than would Canada. Under such a division Canada would not receive any compensation for the work previously done, including the construction of the Welland Canal.

It would appear reasonable that the entire project should be placed on a selfliquidating basis and that the method of assessing tolls and the division of the toll revenue should be worked out with Canada prior to the beginning of construction.

CAN THE PROPOSED SEAWAY BE SELF-LIQUIDATING?

To determine whether the seaway could be self-liquidating involves a consideration of the cost of construction plus annual carrying charges, the probable volume of traffic and the revenue which may be expected from tolls on such probable traffic.

The Office of the Chief of Engineers of the United States Army has made estimates for three different channel depths. Only the proposed 27-foot channel will be here considered. It is estimated that the cost for remaining work for a 27foot channel would be $818,063,000. Prior work has cost $164,112,000, making the total cost for the 27-foot channel $982,175,000. It is believed, however, that certain important factors will make the actual cost substantially higher than these estimated costs.

First, no estimate of the cost for improving harbors has been made, although such harbor improvements are necessary to give the seaway practical utility. General Pick, in testimony before the House Committee on Public Works, stated that the cost of providing entrance channels and turning basins to outer docks for 17 typical Great Lakes harbors would be $28,848.000, but this does not take into consideration all of the work that must be done to coordinate harbor depths with that of the seaway.

It was estimated by Major General Breene, after a study at Chicago, Ill.; Cleveland, Ohio; and Buffalo, N. Y.; that the cost of deepening these three harbors would amount to $14,651,000 as contrasted with General Pick's estimate of $4,041,000 for providing a 27-foot channel and turning basins at these same points. The additional cost for deepening harbors would, therefore, increase General Pick's estimate by 262.5 percent. To improve the 17 typical Great Lakes harbors studied by the Army engineers, the cost for harbor work would thus be increased from $28,848,000 to $104,574,000. To improve all harbors on the Great Lakes would make the total cost for harbor work substantially above this amount.

That General Breen's estimates of harbor improvement costs are not unreasonably high is indicated by a study made by the Engineering Department of the City of Buffalo. This study shows that the complete improvement of Buffalo Harbor, to coordinate it with the seaway, would cost for both public and private outlay $46,890,000.

In 1929 Brookings Institution estimated that the cost of harbor improvements, port facilities, and terminal reorganization would reach $250,000,000 for each of 10 important cities. On the basis of an increase in construction costs since that time instead of $250,000,000 for 10 harbors the cost would now be $655,000,000.

As further evidence that the actual cost will be substantially higher than the estimate made by the Army engineers, there was published in Report 810, part 2, of the Senate Committee on Foreign Relations, Eightieth Congress, second session, a table containing the estimated and actual cost of six large governmental projects. The average of the difference between estimated costs and actual costs in these governmental financed projects is 105 percent. Last year the House Appropriations Committee, in its report on the general appropriation bill, stated that the total estimated Federal cost of budgeted river and harbor and flood control construction projects, including the lower Mississippi and Sacramento Rivers had increased from an original estimate of $4,364,057,750 to $7,034,408,070, an increase of 52 percent.

It seems clear from an analysis of the foregoing that the cost of the proposed seaway and power project, on the basis of a 27-foot channel, including coordinating harbor developments, will be much greater than the estimated cost of $818,163,000, and may, in fact, be more than double this amount.

CARRYING CHARGES

The Army engineers estimated the carrying charges, for the remaining work, on the entire navigation phase from Duluth, Minn. to Montreal, Canada at $20,360,000. By taking into consideration also the cost of work which has been done the carrying charges would become $26,153,000. Obviously, if the cost is double the estimates made by the Army engineers, the carrying charges will likewise be doubled and exceed $52,000,000 per year.

PROBABLE VOLUME OF TRAFFIC

To determine whether or not this amount can be offset by revenue from tolls we must next consider the probable volume of traffic. The Department of Commerce has estimated potential traffic to range between a minimum of 57 and a maximum of 84 million tons. The preponderance of the tonnage consists of iron ore, grain, coal and petroleum, with general cargo estimated at 11,278,000 tons. We will consider briefly the estimates on each of these commodities.

IRON ORE

It is estimated that potential iron ore traffic will range from 30 to 371⁄2 million tons. This estimate is arrived at by determining the maximum number of vessel passages which could be locked through the Welland Canal during a season of operation, and then multiplying this number by 15,000 tons, assuming such large vessels loaded to capacity. Apparently no consideration was given to the fact that present plans call for the production of only 10,000,000 tons of ore in Labrador, and according to Mr. Humphrey 2 to 4 million tons of this amount will move in ocean vessels to eastern seaboard points; nor is any consideration apparently given to the adequacy of ore in the Lake Superior district nor the consumption of ore in the Great Lakes area. We submit that the method used is not sound basis on which to judge the amount of ore likely to move via the proposed seaway.

GRAIN

Secretary Sawyer has estimated the amount of grain which will probably move via the proposed seaway as ranging from 62 to 111⁄2 million tons. Secretary Sawyer stated, however, that the grain traffic is more likely to be in the neighborhood of the minimum rather than the maximum tonnage indicated. The estimate of from 6 to 111⁄2 million tons is based on an assumed annual grain export volume approximating 20 million tons, and this estimate is based on a continuation of the Marshall plan during this period.

Although the Department of Commerce states, in its report, that it is not possible to estimate with any degree of precision the export volume following 1955, and the uncertainty as to the volume of grain that may be exported after the Marshall plan is discontinued, the Department neverthless uses the figure of from 6 to 111⁄2 million tons in determining revenues to be derived from tolls on this traffic to make the seaway self-liquidating. Records for the past 20 years show that exports of grain from North Atlantic ports in both the United States and Canada averaged only about 51⁄2 million tons a year. It is quite clear that the minimum estimate of 62 million tons of export grain via the seaway is much too high.

COAL

The Department of Commerce has estimated potential coal traffic at 4 million tons annually. The basis for the Department's assumed 4 million tons of traffic is the movement of bituminous coal to the Canadian Province of Quebec. Prior to World War II a large proportion of coal moving to Quebec came from Nova Scotia, but during the latter years of the war practically all coal imported into Quebec came from the United States.

According to the statements of Prof. John L. McDougall of Queens University, Kingston, Ontario, Canada, coal production in Nova Scotia is being substantially increased, and that much of the Quebec market will be restored to the Nova Scotia producers. On the basis of the contemplated increase in the production of coal in Nova Scotia and the continued movement of coal via rail and the present 14-foot Canadian channel, the latter being continued on a toll-free basis, the potential coal traffic is more likely to range from 1 to 11⁄2 million tons than from 2.8 to 4.3 million tons.

PETROLEUM

Another important commodity on which the Department of Commerce has submitted an estimate is that of petroleum. Estimates for this traffic are stated to range from 6 to 20 million tons. Secretary Sawyer, however, in commenting on this estimate, stated that "Another item of traffic which the Department expects will move via the seaway is petroleum, although in the case of this traffic it is impossible to predict with any assurance the timing, the direction, or the volume of movement." In making its estimate the Department of Commerce stated: