We respectfully urge the Foreign Relations Committee to recommend disapproval of Senate Joint Resolution 27, and all other resolutions which have for their purpose the approval of this seaway and power project.

STATEMENT BY IRVING T. GUMB, EXECUTIVE VICE PRESIDENT, NEW JERSEY
STATE CHAMBER OF COMMERCE

The New Jersey State Chamber of Commerce has, in times past, repeatedly stated its opposition to the St. Lawrence seaway project.

We see no reason for changing this position in the light of current developments respecting the proposal.

We still view it as an extremely costly undertaking which promises far more in benefits to the Nation than it can reasonably be expected to accomplish.

Arguments offered in its behalf as a major defense project are more than offset by the convincing array of data given your committee which show that the years of time consumed in construction, as well as the serious questions raised as to the practicality of the various features credited to the project, would not only make it of little use in the present war emergency but could conceivably result in the dislocation of existing transport, industrial, and other facilities already contributing heavily to the Nation's defense production effort.

Following is a brief summary of the reasons why New Jersey business opposes the St. Lawrence seaway project:

1. The majority of benefits of construction go to Canada.

2. It is required neither from the standpoint of navigation nor from the standpoint of power.

3. The seaway transportation would be, in the main, handled by Canada.

4. The United States Government would have to pay the major share of the construction costs.

5. Cost of maintenance, if allocated to shipping, would require prohibitive rates. Therefore, upkeep of the project would have to be paid largely by taxpayers of this country.

6. The project would undoubtedly cost far more than presently estimated. The Federal agencies have a notorious habit of underestimating the cost of public-works projects urged upon Congress for approvel.

7. It would reduce work for transportation employees, coal miners, maritime, and other workers.

8. It would dislocate many of our industries.

9. It has not been considered by the agency charged with fairly administering the Transportation Act of 1940.

STATEMENT BY JAMES W. DANAHY, VICE PRESIDENT, WEST SIDE ASSOCIATION OF COMMERCE, INC., NEW YORK, N. Y.

The West Side Association of Commerce, a sectional chamber of commerce in the Borough of Manhattan, city of New York, respectively voices its opposition to the St. Lawrence seaway project. This is a reiteration of the viewpoint which this association has held consistently since 1933. Our organization is made up of approximately 1,200 memberships and includes companies engaged in industry, banking, transportation, communications, hotels, warehousing, wholesaling, and retailing.

We base our opposition in the first instance on the fact that the seaway is a proposed expansion of the socialization of American business. There can be no question that behind all of the oratory and arguments of the proponents there is an underlying and insidious force which is continuing to keep the project alive in Congress, despite its many defeats.

CHANGING REASONS CREATE SUSPICION

The ordinary project before Congress stands or falls as the result of analysis of a well-defined and consistent set of principles. The reverse has been true in the case of the seaway. Over a period of the last 20 years, the arguments as to why it should be constructed have been consistent only in their changeability. As each expediency rose, the proponents' reason have alternated between (1) bringing bananas to the Midwest; (2) export of midwestern grain; (3) export of automobiles; (4) utilization of manpower; (5) importation of coffee and

sugar; (6) need of additional power; (7) transportation of petroleum; (8) national defense; (9) iron-ore shortage. It stands to reason that any proposal which reappears as often in so many disguises, as has the seaway, must have its origin not in these fluctuating arguments of expediency but in some concept which has been carefully conceived. It is not our desire to be unduly alarmist, but we must call attention to the fact that this is identically the method which has been and is being pursuel by the un-American forces of collectivism.

We have only to consider the TVA, Federal Barge Line, the ownership of 20 percent of the Nation's power by the Government, the expansion of Federal public housing and the Federal inroads into education to appreciate the extent to which this country has already been socialized. We likewise have only to read the philosophy of Stalin and Lenin to know how much emphasis they place on the control of power and communications in order to appreciate why so much pressure is being brought year after year on Congress to construct the St. Lawrence seaway.

As a further indication of the belief that some unrevealed source is behind the seaway, it would be of interest to know why so many persons are urging the importance of the power phase of the project when the actual power which would be developed is less than that obtained from four existing plants in the State of New York and is also less than the planned yearly expansion of privately owned facilities in this State.

OTHER SEAWAY ARGUMENTS HAVE BEEN DISAPPROVED

It is not the desire of this association to occupy the time of your committee by going into detail concerning the various arguments of the proponents which are changed from year to year. Permit us, however, to dispose briefly of the two or three current arguments. First of all consider

(1) National defense. It is an unmitigated falsehood to say that the St. Lawrence River and Gulf constitute a "protected waterway." During World War II, 13 Allied ships were sunk in this stream. Not a single German submarine was intercepted. Submarines are known to have traveled down the St. Lawrence to a point within 250 miles of Montreal. The seaway proponents tell Congress that the MacArthur lock was America's most vulnerable point in World War II. If this single lock, with a 21-foot rise, was so vulnerable, what could happen in the case of a seaway containing 15 locks and a rise of 576 feet. A single bomb or sabotage on a vessel being locked through the seaway can close the canal for the duration and bottle up every ship between Duluth and the point of attack. The testimony of former Secretary of War Royall before your committee several years ago is of major interest to those who believe that the seaway can easily be defended.

(2) Need of iron ore from Labrador.-For 20 years we have been reading about the early depletion of the Mesabi Range; yet, the Geological Survey indicates that it contains almost as much ore today, despite the removal every year of 80 million to 90 million tons. Obviously, new deposits are “proved" only as they become necessary in order to avoid excessive taxation. Even if the Minnesota and Michigan ranges should run out of ore, the Steep Rock mines in northern Ontario have reserves, according to Cyrus S. Eaton, chairman of the Steep Rock Mining Co., of 1,500,000,000 tons which is nearly four times the proved reserves in Labrador. Two existing railroads cover the 140-mile distance between Steep Rock and Lake Superior. In addition, private companies are now processing for commercial use the 60 billion tons of taconite and jasper ores which are found in the Superior ranges. Even if we double our present usage, there is sufficient ore in the Superior region to last this country for two or three centuries. The most ridiculous argument of all is the statement that Labrador ore would be needed in the Midwest if a war should develop. In such an instance, our eastern supply of ore from Venezuela and Africa would undoubtedly be cut off. Consequently, Labrador ore would be used by eastern mills and no seaway is necessary for distribution to these plants. It is nonsense to expect that steel companies would make us of the cross-distribution plan of sending Lake Superior ore to Philadelphia and Baltimore and Labrador ore to Pittsburgh, Youngstown, and Chicago.

(3) The self-supporting argument.-Congress is asked to place on the backs of American taxpayers the cost of a project based on figures which, according to the Honorable W. Averill Harriman, former Department of Commerce Secretary, are "very rough estimates rather than conclusions resulting from careful study" (p. 400, Senate hearings of 1947). In 1941, the Department of Commerce thought

that from 5 million to 10 million tons of American commerce would use the seaway. This was before the self-supporting feature was introduced in 1947. Something had to be done to give the project the appearance of being self-sustaining, So by 1951, without any new survey having been made, the anticipated traffic was jumped by the same Department of Commerce to a figure of 54 million to 83 million tons. The first set of figures may be correct; both sets cannot possibly be true. Yet the Government is asked to approve the seaway founded on such divergent testimony by its principal proponent. Furthermore, the Department in recent years has almost completely ignored the estimate of the Army engineers that the capacity of the Welland locks-the controlling factor of the entire seaway-is 25 million tons a year. This tonnage, by the way, would have to include the 10 million tons of local Lakes traffic which would not use the tolls-paying feature at the International Rapids. Some proponent recently indicated that the figures of the Army engineers were guesswork and not realistic. Yet the Department of Commerce itself in 1941 stated the "full capacity" of the seaway project was 25 million tons. You will note that we have italized the word "full." Apparently the Commerce Department had faith in the engineers' estimates. Just as the figures on tonnage changed from year to year, so have the figures on cost. Yet the proponents expect Congress to commit the American taxpayer to a billiondollar scheme based on "very rough estimates." About all we do know is that only 4 percent of American ships could use the seaway and that 30 out of the 32 largest American steamship lines informed Congress that they would not or could not make use of it. Not a single American vessel now under construction could navigate the seaway.

CONCLUSION

We might go on indefinitely and discuss the damage to American railroads, the closing of the project during 5 months of the winter, the loss to American labor and the harm which it would do to Atlantic ports which are so vital both in time of peace and time of war. We believe, however, that we have introduced and disposed of sufficient arguments of the proponents to warrant another disapproval by Congress of this uneconomical proposal.

In closing, we desire to say that we do not believe the seaway could be successful, in which case its construction would be a gigantic fiasco at the expense of American taxpayers. If, on the other hand, it was utilized to any extent, the groups who might stand to profit from this project would in all probability be the foreign shipowners and the foreign buyers. Experience has shown that lower rates, whether brought about through subsidy or otherwise, normally accrue to the advantage of the foreign buyer rather than the American producer. It is the hope of this association that Congress will disapprove this visionary and imprac. tical project by such a majority that even the collectivists and public-power proponents will concede defeat. This is the time to stop the sovietization of American industry.

STATEMENT OF H. J. SCHROEDER, CHAIRMAN OF THE BOARD, ILLINOIS TERRITORY INDUSTRIAL TRAFFIC LEAGUE, MOLINE, ILL.

The Illinois Territory Industrial Traffic League (hereinafter referred to as the league) is a voluntary, unincorporated, nonprofit association organized for the purpose of promoting and protecting the transportation interests of business and industry located in Illinois, southern Wisconsin, northern Indiana, northern Missouri, and eastern Iowa, in what is commonly known as Illinois Freight Association territory. Its membership embraces substantially all types of industries, as well as chambers of commerce and trade associations, geographically distributed throughout the said territory.

The league has consistently taken the position that the development of the Great Lakes-St. Lawrence seaway and power project is not needed as an additional transportation facility and would be economically unsound.

SEAWAY NOT NEEDED AS ADDITIONAL TRANSPORTATION FACILITY

There has been no sound evidence presented to substantiate the allegation that the seaway is needed as an additional transportation facility. Our present transportation facilities were able to handle efficiently and expeditiously the record volume of traffic tendered to them during World War II. At no time dur ing that period were there any serious shortages in transportation equipment.

The Interstate Commerce Commission reports that during the peak year 1944 our transportation agencies transported 1,066,717 million ton-miles of intercity freight, 69.92 percent of which was handled by the railroads. This decreased in 1950 to 1,017,059 million ton-miles, of which 58.69 percent was transported by rail carriers. Since transportation facilities of all types have increased since 1944, it is obvious that present facilities are adequate to handle a substantially greater volume of traffic. In considering the seaway as an additional transportation facility, it should be remembered that it could be utilized only 7 months of the year and during the remaining 5 months it would be necessary for other forms of transportation to handle the full volume of traffic.

Since, as we shall later point out, the seaway would not be self-liquidating and would not pay its proportionate share of taxes, its subsidized operation by the Government would be unfair to competing forms of transportation.

The construction of a 27-foot seaway would give foreign ships a distinct advantage over American-flag ships. Frazier A. Bailey, president of the National Federation of American Shipping, testified at hearings before the Committee on Public Works, House of Representatives, on House Joint Resolution 2, that only about 4 percent of our privately owned American-flag merchant fleet could operate through this waterway with full utilization of weight-lifting capacity, whereas about 15 percent of foreign ships would be able to use the waterway. The construction of a project which would be used principally by foreign ships which are in direct competition with American privately operated transportation agencies is certainly not in the interest of protecting American enterprise. The allocation of manpower and materials necessary to construct the project would have serious effects on our defense program and civilian economy. Highway construction and rehabilitation is being sharply curtailed because of shortages of steel. The railroads' car- and locomotive-building program has been slowed down because of insufficient allocation of steel. At a time when our present transportation system, which has already proven its ability under the most difficult circumstances, is denied necessary materials, it appears inadvisable to authorize an unnecessary project which would further aggravate present material and labor shortages. Our first consideration should be to maintain our existing transportation system in a position to meet any emergency which may arise. The seaway would require at least 5 years to construct, and in the meantime present transportation facilities would continue to handle our Nation's traffic. Even after the seaway is completed, it would be valueless for transportation 5 months each year.

SEAWAY WOULD BE ECONOMICALLY UNSOUND

Army engineers estimate the minimum annual carrying charge for a 27-foot channel at $20,360,000. This does not take into consideration the cost of harbor improvements which would substantially increase this estimate. The cost of providing entrance channels and turning basins to outer locks for 17 Great Lakes harbors is estimated by the Army engineers at $28,848,000. It is obvious that when similar work is performed at all harbors the cost would be substantially greater and that the carrying charges would be considerably in excess of the estimated $20,360,000.

The Department of Commerce in 1941 estimated the potential United States tonnage of the seaway at 7 million tons anually with a possible 10 million tons at a later date. Assuming an additional 6 million tons for Canada, the Department estimated total seaway traffic at 16 million tons. The production of Labrador ore will not exceed 10 million tons annually, and if 8 million tons moved through the seaway the total potential tonnage would not exceed 24 million tons. Assuming that only three-fourths or 18 million tons of this traffic consisted of bulk commodities, with a maximum toll charge of 50 cents per ton, and the remaining 6 million tons was general cargo, with a suggested toll charge of $1.25 per ton, the total toll charges would amount to $16,500,000. This is far short of the $20,360,000 annual carrying charge estimated by the Army engineers.

Proponents of the seaway state that iron ore in the Mesabi Range of Minnesota is rapidly becoming depleted and that the project is necessary to make foreign ore accessible to Great Lakes steel mills. However, Wilfred Sykes, chairman of the executive committee of Inland Steel Co., estimates that the Mesabi supply will "last us for the next 30 years or so, after which annual production will gradually decrease." At the same time, there are billions of tons of taconite, a lowgrade ore in the Lake Superior region, which can and will be used by Great

Lakes steel mills long after the richer ores have been exhausted. These views of Mr. Sykes have been concurred in by numerous other executives in the steel industry. There is little support, therefore, for the argument that the seaway is necessary to transport Labrador ore to Great Lakes steel mills.

It is the position of the league that the seaway (a) is not needed as an additional transportation facility; (b) could not be made self-liquidating; (c) is not necessary to transport ore; (d) is not needed in the interest of national defense, but rather through its drain on manpower and supplies would be detrimental to our defense program, and, therefore, should not be approved by the Congress of the United States.

STATEMENT BY W. H. DAY, MANAGER, TRANSPORTATION DEPARTMENT, BOSTON CHAMBER OF COMMERCE, BOSTON, MASS.

Acting on behalf of the Boston Chamber of Commerce, the Maritime Association of the Boston Chamber of Commerce, the New England Shippers Advisory Board, and the New England Traffic League, I sought an opportunity to appear before the Foreign Relations Committee in opposition to Senate Joint Resolution 27, but the doubt expressed as to the possibility of being heard within the time allotted the opposition, prompted me to cancel this request.

However, I would like to have the record show that those I speak for believe that from a cost standpoint the Great Lakes-St. Lawrence River navigation project is unwarranted and could not be made self-liquidating by the assessment of tolls against shipping.

Also, that existing transportation facilities with such additions and betterments as changing conditions prompt private enterprise to make, will prove adequate to meet all foreseeable demands.

STATEMENT OF WALTER P. HEDDEN, DIRECTOR OF PORT DEVELOPMENT FOR THE PORT OF NEW YORK AUTHORITY

My name is Walter P. Hedden and my business address, the Port of New York Authority, 111 Eighth Avenue, New York 11, N. Y. I have been associated with the port authority for nearly 30 years. My present position is director of port development. I have the administrative responsibility for analyzing the costs and prospective revenues for port authority projects in the field of transportation and terminal development and recommending whether they are economically practicable on a self-supporting basis. The port authority has financed and presently operates $400,000,000 worth of such projects. Our financing is done with revenue bonds, which have neither tax support nor State guaranties. I also am in charge of the activities of the port authority in regard to the protection and development of the commerce of the port of New York.

At various times I have been president of the American Association of Port Authorities, president of the Atlantic Coast Marine Terminals Association, and an unpaid transportation consultant during World War II to the War Production Board and the Office of Defense Transportation.

The Port of New York Authority is a joint agency of the States of New York and New Jersey for the development of the port of New York, a district lying in both States, of about 25-mile radius around the Statue of Liberty.

Our studies of the St. Lawrence navigation project have extended over a period of more than 20 years. On the basis of these studies our board of commissioners has repeatedly adopted resolutions in opposition to the navigational project and has directed the staff to present the facts developed to Members of Congress and other appropriate bodies. I had the privilege of appearing before the Senate Foreign Relations Committee on this subject in 1946 and 1947, and before the House Public Works Committee on several other occasions, the latest being April 24, 1951, about 10 months ago.

My testimony before the House Public Works Committee (on file with that committee) including maps, tables, and other supporting data, together with my interrogation at that time and certain supplemental data furnished on May 3, 1951, at the request of the committee, has all been printed in a pamphlet of 44 pages, which I am filing as a part of this statement. This procedure will greatly shorten my present testimony, which is confined to summary observations and certain data which bring the facts down to 1952.

The Port of New York Authority's conclusion in regard to the navigation features of the St. Lawrence project, as stated on page 2 of the attached pamphlet

are