The Brookings Institution in its study of the St. Lawrence seaway (in 1929) n page 97 states that the provision of harbor and port facilities is estimated o be $250 million.

Piers are most successfully operated where there is constant uninterrupted egularity of shipping services throughout 12 months of the year in order to roduce a sufficient amount of volume of cargo ingress and egress to keep freight ates at a reasonable level and still produce the operating revenues needed for uch an expensive installation.

Actually such a pier would operate on a 7-month basis and the problem of tevedores must be considered in this connection. If a pier is only operated to 8 months a year, what becomes of the help to load and unload for the ther 4 months? Are they put on an unemployment-compensation basis or do hey go to other employment? If they go to other employment, what brings hem back when the pier is operating again in the spring?

Modern port facilities are even more complicated where a diversity of cargoes re to be handled, such as bulk cargoes of grain, coal, limestone, cement, etc., nd general cargoes, such as boxed, bagged, cased, or palletized articles. If port is anticipating the handling of both types of cargoes, basic cost of ier-handling facilities would be quite tremendous, and from a business standoint would never pay off unless they could be guaranteed a substantial volume f cargo moving regularly each of the 52 weeks of the year.

In any operation where only 7 months is contemplated, suggestion has been hade that the basic capital investments for modern pier-handling facilities would be so tremendous as to make the operation a virtual failure or else Fould produce a freight rate so high as to discourage cargo movements innd out-bound from such a port. There seems to be no question that the average rge-scale shipper in the United States today would not be interested in shiftng his base of transportation from one to another port for a 7-month operatng period.

It is stated quite unequivocally that the successful operation of pier 80 in hiladelphia is predicated upon a terrific and constant volume of cargoes, hether bulk or packaged, and that such a pier would find it virtually imossible to operate successfully on a 7-month basis.

DEPTH

The depth of the seaway in the agreement between Canada and the United tates and in the resolution which your committee is considering is 27 feet. Is it not generally accepted by the United States merchant marine that a essel must have at least 2-foot clearance and preferably more? This would ake it possible to only take a boat drawing 25 feet through the projected 27Dot seaway.

In fresh water, a vessel draws more than in salt water. How many underriters would insure a boat drawing 25 feet going up a 27-foot seaway?

I am submitting a table which shows the draft of 3,346 vessels in the United tates oceangoing merchant marine and a list of the 57 vessels now under onstruction.

ABLE A.-Draft of United States ocean-going merchant vessels as of Jan. 1, 1952 (according to number)

Includes active privatey owned vessels, Maritime Administration-owned vessels, and 3 Panama Canal mpany vessels, but excludes those merchant ships controlled by the military.

Source: Letter from National Federation of American Shipping, Inc., Washington, D. C., dated Feb. 4, 52, to Senator Leverett Saltonstall.

You will note that the shallowest of any of the ships under construction is 29 or 30 feet with the largest ranging up to 34 or 35 feet. This additional draft is due, I understand, to two factors: First, heavier loads make the ships more economical to operate; second, greater speed is required to unload today with the higher costs of operation.

Is not the channel bound to silt in so that it would extremely difficult to be sure that the project depth of 27 feet was maintained at all times? I have just mentioned the percentage of the United States merchant fleet which could go loaded through a 27-foot channel on the basis of drawing 25 feet.

Again, I have just discussed the fact that not one single United States merchant vessel of the 57 under construction in the United States yards as of January 1, 1952, could go through a 27-foot channel. The shallowest draft of any of these boats is 29 or 30 feet, with the largest ones ranging up to 34 or 35 feet, and I would like to submit a table which shows the drafts of the vessels now under construction.

TABLE B.-United States flag oceangoing merchant vessels by draft' on order and under construction in United States yards as of Jan. 1, 1952

NOTE. Excludes passenger liner United States as draft is restricted information.
Source: From letter from National Federation of American Shipping, Inc., Washington, D. C., dated
February 4, 1952, to Senator Leverett Saltonstall.

WHAT UNITED STATES SHIPPING COMPANIES WILL USE THIS CANAL IF BUILT?

I have been in correspondence over the last 3 or 4 years with representatives of American shipping companies. I communicated last with them only a year ago. I have yet to find a single American steamship company operator who states affirmatively that he will use this canal.

For this reason, has not this question got to be studied with considerable care, or is the Congress going to rely on new companies being formed with a new type of vessel that can be economically operated in a seaway of this character? Let me now present a very few statements from steamship operators to point out their attitude toward the seaway.

I quote first in part from a communication typical of many, this being a statement from Mr. James A. Farrell, Jr., president, Farrell Lines, Inc., of New York: "It is my continued considered opinion that the proposal is neither a defense project nor a commercial practicality. Even if the project

were adopted at fantastic, unknown cost, I cannot believe it would result in any substantial increase in use of Great Lakes waterways by ocean-going tonnage since short navigation season, longer voyage time, increased fuel expenditure and geographical advantages of tidewater ports are controlling economic factors" Here is another significant statement, this one from Mr. John Morel, president of the South Atlantic Steamship Line, Inc., of Savannah, Ga.: "Since the be ginning of World War II, private industry has invested heavily in Americanbuilt and American-manned vessels. These are mostly large vessels with speed averaging better than 15 knots. If this project were to be completed to where ships of large size could be used, the American owner would find himself with vessels which have been given speed at high cost to use on a voyage one-third of which would be limited to a speed of about 6 knots.

"Vessels now using the St. Lawrence for foreign commerce during its open season are small-sized Scandinavians whose operating costs are far below the costs of the American-flag owners. By reason of these higher costs, there are now no American-fiag services competing for this foreign commerce from our Great Lakes ports; and if a seaway is provided for the navigation of large vessels, there is no reason to expect to see the large-sized American vessels competing where the small-sized ones cannot do so.

"In order for American-fiag vessels to compete with the foreigners, it would be necessary for the Federal Maritime Administration to establish essential

trade routes from the Lake ports in order to assist the American owner with an operating differential subsidy, and how any route only operative for 7 months out of the year could be rated essential would be difficult to understand.

"If the project were to be completed, it is my firm belief that vessels using it for foreign commerce would be confined to those in foreign registry." I could quote from many other letters which I have received, but they sum up a belief that the canal would not be used by the American merchant marine, that terminals would have to be built in the Great Lakes that do not now exist and that controlling depths to get to these terminals would have to be deepened at great expense. The American steamship companies would have to open offices to handle their business which would only be busy part of the year. I know from my experience in Boston that the question of adequate stevedore facilities is of the highest importance. How could such facilities be profitably maintained only in the ice-free months?

I would like to call attention particularly to a paragraph from a letter from Hans Isbrandtsen, the owner of the late Flying Enterprise which has received so much publicity because of the heroic conduct of Captain Carlsen. Mr. Isbrandtsen states:

To sum up, I think the chief effort should be on this coast first before giving way to abandonment (or partial abandonment) of existing facilities. Certainly a modern, efficient export port here available at all times and under all conceivable conditions would be far and away preferable to a half-time proposition such as the seaway would perforce be."

In this regard, let me refer to the statement of Mr. Thorkil Host, president of the Moller Steamship Co., Inc., of New York, which appears in a letter he has written to me: * It is our view that the proposed seaway will not be of material value to United States' movements, but will rather cause severe dislocation and temporary unemployment of types of labor that are not easily employable at other tasks. We are presuming that it is not intended to attempt to navigate the waterway during the 12 months of the year, and we presume that it will be unsafe or at least unattractive for high-class ships from the middle of November to about the early part of May each year. During that period the present facilities on the eastern seaboard with piers, tugs, barges, lighters, trucks, and stevedore labor will be required to the same extent as if the waterway did not exist. The railways to the eastern seaboard will be similarly taxed. However, after April 15 of each year those functions should, if the seaway attains its purpose, move to ports on the Great Lakes. Those ports have not yet the pier facilities and the many complementary facilities that are required to handle large volumes of general cargo moving overseas. The labor is also not available and if it were made available it would receive employment only on a seasonal basis."

It seems clear to me, therefore, that in order to build up stevedoring companies to handle ocean-going steamships that might come through a 27-foot seaway, such stevedoring facilities would have to be available to the shipping companies on a year-round basis, even if the seaway were closed by ice 4 or 5 months a year. I know from experience with the port of Boston that one cannot simply hire stevedores when it happens that they are needed. In order to retain their services on a year-round basis either the companies would have to pay them in one form or another during the frozen season, or else what is much more likely they would simply receive unemployment insurance from the States and the Federal Government.

Let me emphasize at this point, with regard to labor, that the American merchant marine fears that ships operated by cheap foreign labor are the only ones that would be liable to utilize the proposed seaway. In this connection, you must remember that we are paying large sums in subsidies to American shipping so that it can endeavor to compete with foreign bottoms. Would we, by building this seaway, have to pay even higher subsidies to the American merchant marine so that it could build and operate boats drawing 25 feet to go up the seaway? If we want United States vessels to handle such business, it seems clear to me that we would.

I call attention again, in view of the last sentence of Mr. Host's letter, to the problem of stevedoring companies and the people who work for them. Oil by tankers

Mr. Chairman, I have also been in touch with large tanker operators and I find that they have no plans to move oil up the St. Lawrence seaway, in spite of the fact that the United States Department of Commerce would lead us to believe that petroleum would be one of the major items of transport.

As regards the transport of oil on the St. Lawrence seaway, let me say that there are today two pipelines from Portland, Maine, to Montreal. Portland. remember, is an ice-free port and these pipelines can operate the year around. whether the St. Lawrence River is frozen or not. With the expanding of production of Canadian oil, I submit that it will move by pipeline. It is already moving by pipeline from Alberta to the Toronto area. Oil moves by pipeline from some of our southern oil-producing States to the Great Lakes area. I believe that the estimate of 6 to 20 million tons of petroleum moving over the seaway cannot be justified.

I ask your committee, Mr. Chairman, whether they know of a single American company that is prepared to ship petroleum products through the proposed seaway?

PRESENT 14-FOOT CHANNEL AND WHO USES IT

At the present time there is a 14-foot channel into the Great Lakes and through it go foreign ships very largely of Canadian and other registry. In fact, I find that in 1951 not a single American flagship sailed up or down this channel.

Here is the situation as quoted from a memorandum prepared by Walter J. Kelly for the board of directors, Detroit Board of Commerce, dated December 7, 1951:

"There now exists direct general cargo service between the Great Lakes and Northern European, Scandinavian, Baltic, Holland, Mediterranean, Central American and South American ports. This service-after a wartime lapse was resumed with the opening of navigation in 1949 and was expanded in 1950 and 1951. In 1951 two new lines, the Hamburg-Chicago and the Fabre (French). commenced operation. The Hamburg-Chicago line started through service to and from Northern Europe, using six newly constructed ocean-going vessels: and the Fabre line operated between Detroit and the Mediterranean with two newly constructed ocean-going vessels. Next year the Fabre line expects to add two or three additional ships. This raises to six the overseas shipping lines serving Detroit. Fjell line operates to and from Scandinavian, Baltic. and Central American ports; Oranje line to and from Antwerp, Amsterdam and Rotterdam; and the Swedish Chicago line to and from Scandinavian ports. The ships of all six of these lines use the existing canals, and presumably would continue to do so-toll-free-even if an additional channel were to be built." Herewith is a list of foreign-flag vessels which in recent years have used the 14-foot channel on the St. Lawrence.

Source: From letter from National Federation of American Shipping, Inc., dated Feb. 4, 1952, to Senstor Leverett Saltonstall.

You will note that in 1951 only 40 ships used the channel, making 100 round trips. The average draft of these vessels is approximately 12 feet. Their aver age carrying capacity is approximately 2,000 tons.

I believe it is of importance to note that there are some 3,000 foreign-flag vessels engaged in commerce currently capable of navigating a 14-foot seaway, but during 1951 only 40 did so. If the cargo were available, is it not fair to suppose a far greater number would have utilized this seaway?

Foreign operators are able to use profitably these smaller vessels while Amer ican operators, because of high labor and other costs, have been forced to develop larger and larger and faster and faster types of vessels in order to be able to compete. As an example, today the labor differential between a vessel manned with American labor and a vessel manned with British labor is three to one. You must remember the Congress, recognizing the competitive factors, has provided construction subsidies and operating subsidies for the American merchant marine. As only foreign ships now use the 14-foot channel, I submit that they would probably be the ones who would use any seaway that is built, if they were to

expand their services in the Great Lakes beyond what they already can handle toll-free through the 14-foot channel.

IRON ORE

When the seaway was first proposed and for many years thereafter, no one knew that there was a large iron-ore deposit in Labrador. Nevertheless, the Department of Commerce made up a list of potential traffic to justify the cost of the seaway. Now, we find a shift of emphasis to the potential traffic in iron ore and this traffic has become perhaps the foremost argument offered I for the seaway.

There is no question about our need for a supply of iron ore to assure that our blast furnaces be kept in operation, but where that iron ore is to come from and in what part of the country it is to be used I think is a question that needs much further exploration.

I have been in communication with many of the steel companies of America. I certainly find no unanimity of opinion as regards the need of this seaway for the transportation of iron ore except among those who have made an investment in Labrador.

The proponents of the seaway estimate the revenue from tolls between $36.5 million and $49 million annually. Of the $49 million they estimate $29.2 million is to come from iron ore.

We have just seen the construction of some large steel mills near the eastern seaboard. I believe there is no question that Labrador ore could be delivered to the Pittsburgh area and eastern mills more economically by large oceangoing ore carriers through eastern United States ports and thence by rail than via the seaway.

There are large ore deposits in Venezuela. There is also the Steep Rock field in western Ontario being rapidly developed, and others. The utilization of all these ore deposits must be considered in connection with our national defense, and which ores can be most economically transported to which steel mills in the United States.

And, finally, must we not have adequate research to make complete use of milions of tons of taconite in the Great Lakes? I stress the question of the development of taconite because it would seem to me, if we are talking defense measures, that adequate research for the greatest possible use of taconite, which is actually within our borders, is essential so that we are not dependent on ore supplies from overseas that can be cut off,

I would like to ask these questions:

What studies have been made to convince you that every ton of ore produced in Labrador cannot be delivered economically to the United States steel mills over existing transportation routes without the St. Lawrence seaway?

I believe that an adequate study will show that this can be done. On this point I would like to quote the following taken from a pamphlet published in August 1951 by the Chicago Association of Commerce and Industry (Arthur H. Schwietert and Leverett S. Lyon), page 67:

the requirements for ore of steel mills, Pittsburgh and east, are almost twice the amount of ore produced in the eastern district and imported from foreign countries including Labrador. To meet these requirements interior eastern steel mills must obtain part of their ore supply from the Lake Superior district. It would appear more economical to supply the interior eastern steel mills from Labrador rather than from Lake Superior. If Labrador ore is shipped to Great Lakes steel mills, it will increase the amount of Lake Superior ore which must be shipped to interior eastern mills. It is highly possible that the competitive situation will force the use of most of the Labrador ore in the eastern area." Again, in considering the transportation of ore, I submit that an atomic attack would put the seaway out for an indefinite period, whereas adequate rail facilities could be put back into operation very quickly. And, if we are discussing the seaway as a defense measure for the transportation of iron ore, it does not meet the necessary defense criteria, namely, continuous operation under enemy attack. It does not meet the defense criteria of continuous operation under any circumstance as it is icebound 4 to 5 months a year.

Is it not perfectly clear if Labrador iron ore is the big reason for the seaway that an all-rail route would still have to be provided?

The question of providing rail transportation is not only true for iron ore, but it is true for any other product that the proponents state will be potential traffic on the seaway. The railroads have got to be ready to handle all traffic during the winter season when the seaway is frozen. This means they have got to have the cars ready, the engineers ready, and the crews ready to do this.