General treasurer: Boyd J. Simmons, vice president, Continental Illinois Nationa Bank & Trust Co. of Chicago Chief executive officer: Leverett Lyon, the Chicago Association of Commerce an Industry DIRECTORS (OTHER THAN OFFICERS) R. F. Baity, vice president, sales and director, Standard Oil Co. of Indiana Carl A. Birdsall, president, Continental Illinois National Bank & Trust Co. o Joseph L. Block, vice chairman and vice president, Inland Steel Co. George W. Blossom, Jr., president, Fred S. James & Co. Kenneth F. Burgess, partner, Sidley, Austin, Burgess & Smith Ronald J. Chinnock, senior partner, Farr & Co. Fairfax Cone, chairman, Foote, Cone & Belding James A. Cunningham, vice president, the University of Chicago Edward J. Doyle, president, Commonwealth Edison Co. Leigh R. Gignilliat, Jr., vice president, American national Bank & Trust Co. of Chicago F. G. Gurley, president, Atchison, Topeka & Santa Fe Railway system Homer Hargrave, partner, Merrill, Lynch, Pierce, Fenner & Beane Henry T. Heald, president, Illinois Institute of Technology J. L. Holloway, president, Crane Co. John Holmes, president, Swift & Co. Wayne A. Johnston, president, Illinois Central Railroad James S. Knowlson, chairman and president, Stewart-Warner Corp. Arthur T. Leonard, senior vice president, City National Bank & Trust Co. A. C. Nielsen, president, A. C. Nielsen Co. James F. Oates, Jr., chairman, the Peoples Gas Light & Coke Co. R. I. Parker, commercial vice president, General Electric Co. W. A. Patterson, president, United Air Lines, Inc. Edward Byron Smith, executive vice president, Northern Trust Co. Harold Byron Smith, president, Illinois Tool Works Hermon D. Smith, executive vice president, Marsh & McLennan, Inc. Leonard Spacek, managing partner, Arthur Andersen & Co. Edward K. Welles, president and treasurer, Chas. H. Besly & Co. Fred T. Whiting, vice president, Westinghouse Electric Corp. Lawrence H. Whiting, president, American Furniture Mart Building Co. Herbert P. Zimmermann, chairman of executive committee, R. R. Donnelley & STATEMENT BY J. K. HILTNER, GENERAL TRAFFIC MANAGER, UNITED STATES PIPE & FOUNDRY Co., BURLINGTON, N. J. For many years I have appeared before Senate committees on behalf of the New Jersey State Chamber of Commerce, the Camden Traffic Club, the Com mercial Traffic Managers of Philadelphia, and many other organizations in opposition to the building of the St. Lawrence seaway. The time permitted to prepare a new statement and ask for permission to appear before your committee in opposition to Senate Joint Resolution 27 is not sufficient. I request therefore that the testimony submitted by me at previous hearings be considered in connection with the proceedings in Senate Joint Resolution 27. [Refer to testimony before Rivers and Harbors Committee of House of Representatives, 1941.] There is no change in our position and the former statements clearly state that position. It is possible that some of the figures used in previous statements require revision, but that does not alter the strength of our position. If I were to testify, it would simply be repetition and as this is the case, there is little use of taking up the committee's time. If you cannot do this, I request permission to file a new statement as quickly as it can be prepared. STATEMENT BY N. W. FORD, EXECUTIVE VICE PRESIDENT, THE MANUFACTURERS ASSOCIATION OF CONNECTICUT, INC., HARTFORD, CONN. In consideration of telegram received from Mr. C. C. O'Day, clerk of your committee, advising that there will be an opportunity for only very brief oral statements by opposition witnesses against Senate Joint Resolution 27, the St. Lawrence seaway project, I have asked that my request for time to appear be canceled and, in lieu thereof, am filing the following statement for inclusion in the committee record. Although our association has appointed many committees to study the Great Lakes-St. Lawrence seaway project during the past 25 years, the conclusions have always been substantially the same. I wish only to outline as briefly as possible the primary considerations that have in each instance led our various committees to conclude that the project is uneconomic from the standpoint of the country as a whole. If Canada desires to proceed with the undertaking without our assistance, we believe she should be encouraged to do so. These conclusions were reached in consideration of the following facts: 1. The short season during which the waterway would be navigable (approxi mately 7 months per year) would place a tremendous burden on other types of transportation during the remaining 5 months. It hardly seems fair to ask the railroads to provide stand-by equipment adequate to handle the peak load during the winter months when operating conditions are most difficult in the Great Lakes-St. Lawrence region and then divert this traffic to the waterway during the summer. 2. The development of the waterway project would doubtless divert a substantial tonnage from the rail carriers, which they can ill afford to lose. America has prospered under a system of distribution that has doubtless been uneconomic but has allowed each of our citizens the widest possible choice of goods that are produced in any section of the country. Our railroads are already hard pressed by the development of motor-carrier transportation. Any further diversion of tonnage as a result of Government subsidy to other forms of transportation will have a serious affect upon our railroads and may constitute the final straw that will compel Government ownership. 3. If the St. Lawrence waterway is ever a worth-while proposal, it will ultimately be developed by private capital, which is far preferable to the present plan. 4. The waterway would be highly susceptible to bombing in the event of war and, accordingly, it should not be considered an emergency for development as a defense measure. 5. It seems probable that, due to the slow speed that would be necessary in traversing the waterway, many of our larger ships would find it unprofitable to use the canal. 6. So far as Connecticut industry is concerned, it is our feeling that we have nothing to gain by the development of the St. Lawrence waterway from either a transportation or a power standpoint. This statement applies equally with respect to the citizens of Connecticut. On the other hand, we doubt if either Connecticut industry or its citizens would be adversely affected by this development except to the extent that all citizens of this country are adversely affected by any unnecessary increase in the cost of Government and this is a matter not to be cast aside lightly during the period when the tax burdens are so tremendous. Based on the foregoing conclusions, it is our hope that Senate Joint Resolution 27 will be unfavorably reported by your committee and will be defeated. STATEMENT OF WILLIAM E. CLEARY, GENERAL MANAGER AND CHIEF ADMINISTRATIVE OFFICER OF THE NEW YORK TOWBOAT EXCHANGE AND THE HARBOR CARRIERS OF THE PORT OF NEW YORK As general manager and chief administrative officer of the New York Towboat Exchange and Harbor Carriers of the Port of New York, with offices at 17 Battery Place, New York 4, N. Y., I am the authorized spokesman for over 100 marine towing and transportation firms which have, for generations, provided vital lighterage services adjunct to the water transport and shipping industry of the greatest port in the world-the port of New York. Represented by me are the owners of over 1,400 self-propelled and non-selfpropelled vessels such as tugs, barges, lighters, tankers, and scows. Once again, as in almost every year for the past half century, political pitchmen are urging upon Congress the passage of legislation authorizing, at a fantastic cost to the American taxpayer, this ridiculous project. In each earlier year, the economic absurdity of this project was so convincingly demonstrated that it was dropped. But now, something new has been added ** it is now offered as being indispensable to national defense. The organizations which I represent will yield to no one when it comes to patriotism. and their vigilance in the interests of national defense were matters of official commendation in connection with the fabulous amount of war material which was moved through the port of New York in World War II. However, they resent and deplore the proponents of this legislation hiding their real motives behind the cloak of "national defense," when competent witnesses have testified time and time again that the St. Lawrence seaway is not vital to the national defense program. So far as national defense is concerned, in what manner has the port of New York ever failed to come through with flying colors when put to the task of moving men and supplies in time of national emergency? From this God-given and man-improved harbor sailed 70 percent of the American military cargo and military personnel during World War II. From this roadstead sailed 60 percent of the European-bound "military hardware" for World War II. Not years hence, but right now, New York, with its 400 deep-water piers, its 500 miles of water front, its 8 railway terminals, its billion-dollar waterside plants, its efficient labor force, its network of highways-right now, New York, the premier port of the world, is ready once again to perform its war-transport function, smoothly, efficiently, and expansibly, if, God forbid, a full-scale global conflagration breaks out. Yet, absurd as it may seem, under the guise of national defense, this same old St. Lawrence seaway, discredited for decades, is trundled out again, to offer, if it were ever built, fancied security which is much more apparent than real. It would be expected to displace the modern functional facilities of the port of New York and its sister Atlantic ports and for at least 7 months a year these natural harbors, improved by generations of the investment and labor of man, would be expected to place themselves on a slowed-down, stand-by basis, only to attempt to resume full blast for the 5 months when the Laurentian Valley is gripped in the icy embrace of winter and silver skates replace scudding ships on the ice-choked St. Lawrence. Are billions of dollars of American taxpaying investments in this port to lie fallow and a mighty seaboard labor force turned into migratory workers, seagoing "Okies," if you please, just because this muddle-headed maritime myth is fatuously urged as a military "must," just so a cozy group of "eager beaver" steelmen from the shores of Lake Erie can get a lower price tag on a swatch of Labrador iron ore, for which existing transport facilities are demonstrably adequate? Gentlemen, let's have done with this nonsense. This seaway, even if it made sense any other way, which it doesn't, would only fulfill the fantastic claims made by its proponents from a national defense angle under those three absurdly unrealistic premises: 1. If Mr. Stalin would magnanimously agree not to start hostilities for 7 years to come, because that's the best estimate as to how long it would take to fully complete this waterway and accomplish the necessary dredging of the Great Lakes ports coincidental with achieving the passage of vessels on a 27-foot draft. 2. If Mr. Stalin would kindly agree to suspend any war activities from November to April each year, during which months the St. Lawrence is totally ice-bound. 3. If Mr. Stalin would graciously agree not to bomb any of the locks, which are admittedly vulnerable and could conceivably be put out of action for months on end, if not for the "duration," by a well-placed aerial bomb or planted explosive. Inasmuch as even the most wild-eyed proponents of this project will admit, it is beyond the realm of credibility that Mr. Stalin would make the above con cessions, even as partial reparations for the Yalta Conference, and I think that we should take this thing out into the open and discuss it for what it really is, an out-and-out "white water" power grab and a subsidy for a little group of midwestern wheat growers and iron ore producers interested in the Labrador diggings. In war or peace, the leopard does not change its spots. This is still only a 7-month freight movement. It would still cost the American taxpayer a billion dollars at least, even if the 27-foot draft is not increased to 30 feet, which would mean an expenditure of about $2 billion. It admittedly won't be self-sustaining, or anywhere near so, under the proposed toll rates. It uselessly cuts down the utilization of New York and the other great North Atlantic ports. It would place a huge labor force on relief, adding incalculably to the estimated cost of this seagoing ditch. It would be a golden boon to the competitors of American shipping, because all the testimony in this matter has proved, without refutation, that only 4 percent of the American-flag ships could navigate this waterway fully loaded on the proposed 27-foot draft. I know that you gentlemen, as have other bodies before you investigating this matter, have been snowed under with a mass of statistics and data all adding up to prove the economic folly of this project and I have not, and shall not, add to your burden by quoting a mass of figures. But I most certainly feel that after weighing the facts marshaled by the witnesses before you during this past week and sifting all the evidence, you too, as have other examining bodies, will reject this St. Lawrence waterway and that you will not permit this "delusion of defense," this "billion-dollar boondoggle," this "king-size Passamaquoddy” to be foisted upon the American taxpayer. STATEMENT BY WILLIAM A. CARR, DIRECTOR, DEPARTMENT OF TRANSPORTATION, ROCHESTER CHAMBER OF COMMERCE, ROCHESTER, N. Y. The Rochester Chamber of Commerce, by various resolutions of its board of trustees and a referendum of its members, stands opposed to the Great LakesSt. Lawrence seaway and power project as an economically unsound undertaking. The following statement of the views of the chamber of commerce was specifically and unanimously approved by the board of trustees on the unanimous recommendation of the executive committee and the committee on inland waterways. While the following discussion was prepared in opposition to previously proposed legislation to authorize this project it is of equal force and effect with respect to legislation now under consideration by your committee. This policy is not based upon personal opinions or convictions of any particular individual or group of individuals, but rather upon a careful analysis of the essential economic factors involved. We outline the reasons for our conclusions below. The total available power in this project is estimated at 1,100,000 horsepower or 820,600 kilowatts, but the firm capacity is only 570,000 kilowatts. (These are actual figures taken from release No. 5160 of the Federal Power Commission, dated December 22, 1950.) This is not more than the normal annual increase in capacity in the State of New York. Upstate utilities alone will install practically as much additional capacity in 2 years. Estimates of the cost of this project vary greatly. General Wheeler's estimate of the cost of the power development alone, in 1947, was $270,346,000. Applying the index of Whitman Requardt & Associates of Baltimore, which shows an increase in the cost of this type of construction since that time of 28.4 percent, the cost today would amount to $350,000,000. The same result can be reached by using the construction index of the Engineering News Record. Assuming a firm capacity of 570,000 kilowatts, the cost of construction per kilowatt is approximately $610. This compares with the top present-day cost of steam-power-plant construction of $175 per kilowatt, which could be located at the market. Thus, it is proposed to spend an additional $435 a kilowatt some distance from the point of use to avoid the use of fuel and to accomplish a saving that would not exceed 3 mills per kilowatt hour. This saving is, of course, materially reduced when consideration is given to the fact that the cost of transmitting power from the hydroelectric plant to the market is from 1 to 2 mills per kilowatt hour. The steam plant can, of course, be located at the market, thus eliminating the cost of long-distance transmission. If we assume 11⁄2 mills per kilowatt-hour for the cost of transmission of St. Lawrence power to the ultimate market, there remains of the 3 mills fuel saving a net of only 11⁄2 mills. Such a saving, assuming a 60 percent load factor (5,200 hours use a year) is worth $7.80 a year per kilowatt. Thus it is proposed to spend $435 to save $7.80 a year, or only 1.8 percent on the additional cost to cover interest, amortization, insurance, etc. These carrying charges will average at least 5 percent even to the Government, so that we are being urged to spend $21.75 per kilowatt annually to save $7.80. From the viewpoint of the taxpayers of the country, this not a bargain in power. Further proof of the above conclusions is involved in the testimony on pages 278-280 of the New York Power Authority before the Federal Power Commission in the hearing on October 5, 1948, which showed that with identical methods of figuring costs there was a difference of only 1.8 mills per kilowatt between the cost of the St. Lawrence power at the dam and the cost of steam-generated power at the market. When the cost of transmission is involved, the saving tends to vanish. Bear in mind that the figures just quoted are taken from the testimony of the New York Power Authority, an advocate of publicly owned and operated hydroelectric-power generating installations. All the calculations above omit any reference to taxes. Furthermore, experience teaches that in most such ventures the actual cost of construction greatly exceeds the estimated cost. Thus, our estimates of cost are undoubtedly much too low. From all these calculations, it is evident that the assumption of cheap power from the St. Lawrence is a myth. Added to all of the foregoing cost figures would be the enormous loss in taxation of private industry which would necessarily have to be added to the tax bills of others. In addition to the cost factors already mentioned, this project will place a further burden on our economy by the siphoning off of the available labor supply. The Labor Department has estimated that the number of employees required at the dam site for a 4-year construction program would average 11,150 per month, ranging from 5.400 per month during the winter months to 23.600 per month during the summer season. For a 6-year project, the average number of employees would be 7,440 ranging from a low of 3,000 to a high of 16,900 per month. These figures are for actual construction work at the site. The number of employees required to produce and transport the required materials would greatly increase this figure. Another important factor arguing against this project is the all-important time element. Steam-plant construction can be accomplished in 2 years, while construction of the St. Lawrence power project will consume from 4 to 6 years. The general conclusion must be that, in this present emergency, when the country is faced with a mobilization program and a drastic revision in its economy, there is no justification for drawing on available manpower to perform a task which will take at least twice the time required for steam-plant construction at a cost of three times as much. Many of the arguments outlined above apply in the case of the transportation phase of the seaway, in which costs of transportation appear cheap largely through the avoidance of taxes. Various estimates have been made of tonnage to be moved via the seaway, but there is no possibility of developing dependable tonnage figures. The original estimates of tonnage on the New York State Barge Canal were utterly unreliable. The forecast indicated 20,000,000 tons annually, yet since its completion the highest total for any one year has been 5,000,000 tons. Estimates of cost have also been proved wrong in many cases. Bonneville Dam was estimated at $42,000,000 and actually cost $80,000,000; the Welland Canal, estimated at $40,000,000, cost $120,000,000; the Chicago drainage canal, estimated at $16,000,000, cost $53,000,000; and the New York State Barge Canal, estimated at $62,000,000, actually cost $176,000,000. As to the actual seaway itself, a 27-foot channel is not practical for other than foreign tramp steamers. Mr. W. F. Heavey, general manager, port of Houston, has stated that that port would lose a lot of business if it had a 27-foot channel instead of its authorized 36 feet, and 31 of the leading oceangoing ship operators in this country have publicly testified that they could not use the proposed waterway and are opposed to it. In addition, there would be a tremendous cost involved in renovating port facilities on the Great Lakes to enable them to handle vessels operating in a 27-foot waterway. Much stress has recently been placed on the value of the seaway to our national defense. It must be kept in mind that the northeastern part of our country is veritably honeycombed by rail and highway networks. The loss of any one or even of several of these systems would not fatally interfere with the movement of essential personnel and materials. On the other hand, during the season when the seaway is open to navigation,the Gulf of St. Lawrence would undoubtedly become a virtual happy hunting ground for modern enemy submarines. and just one well-placed bomb could render both the seaway and the power project useless. There can be little doubt about the fact that an enemy could destroy the locks and sink ships in the narrow channel of the St. Lawrence seaway just as effee |