by a multicrop system, with tobacco, peanuts, livestock, and pulpwood being sources of cash income to the farmer as well as the traditional crop, cotton. Farm income has risen from $162,000,000 in 1900 and $397,000,000 in 1930 to $736,000,000 in 1946. HARTWELL FLOOD CONTROL AND SOIL CONSERVATION The problem The principal need for flood control in the Savannah River Basin is the lower valley, downstream of Augusta. These rich bottom lands are now flooded during the growing season on an average of four times per year, with resulting annual losses to the timber and livestock industries. As a consequence these lands at present have little or no economic value. The Spartanburg, S. C., regional office of the Soil Conservation Service has determined the character and use of the bottom lands in the Savannah River Valley and has reached the conclusion that these lands, if protected from frequent floods, would be highly productive. It is estimated that more than 200,000 acres of these bottom lands can be used for agricultural purposes, either in cultivation or pasture; but can the Hartwell project remove the flood menace? The method of flood control Positive flood control by reservoir operation requires that the reservoir be kept empty so as to store the surplus water during floods. Contrariwise, navigation and power dictate that the reservoir be kept as full as possible so as to augment the low flows of the river during the dry season. The Clark Hill project will probably operate primarily in the interest of navigation and power and while its operation will reduce the frequency of flooding the bottom lands, from four times each year to an average of once every 14 years, it will not permit the full development of the potential value of the lower valley. The Hartwell project will provide a large volume of storage and its operation can justifiably be in the primary interest of flood control. This would reduce the frequencies of damaging floods to an average of once in 20 years. What then, would be the monetary value of this flood control? Evaluating flood control benefits If the valley lands are reclaimed by reducing the frequency of flooding to once in 20 years, thus permitting the cultivation of these lands, it has been conservatively estimated that the annual benefit to be derived can be evaluated at $10 per acre. The total acreage which would be benefited is about 200,000 acres. Considering then the reduction in annual flood damage and the enhanced value of the land, a benefit of $2,000,000 annually is possible as a direct result of the operation of the Clark Hill and Hartwell projects. Prorating this annual benefit between the two projects will depend upon the method of operation of each project. Under any system of operation, it is reasonable to assume that not less than half of the annual benefit must be assigned to Hartwell. Capitalizing this annual savings at 4 percent, $25,000,000 of the initial cost of the Hartwell project should be allocated to flood control. Present HARTWELL AND NAVIGATION Little or no through navigation is visualized on the Savannah River above Augusta, Ga., but below Augusta the river is navigable and commercial barges are now engaged in transporting petroleum and clay products in volume. The Government some years ago instituted a 6-foot depth navigation project on the Savannah River below Augusta. This depth, however, exists only about 60 percent of the time because of dry seasons which affect the flow. The Clark Hill project will so regulate the flows of the river that a 7-foot depth will be available at all times. The influence of Hartwell on this channel will be beneficent and merits our attention. Future The Hartwell Reservoir with its great storage will further regulate the flow of the Savannah River, decreasing the average flood heights and increasing the low water depths in the river below Augusta. The resulting effect will be a sustained 8-foot channel depth. The Corps of Engineers has reported favorably on the construction of a 9-foot channel on the Savannah River below Augusta at a cost of $3,000,000. This cost is inclusive of the benefits derived from Clark Hill but does not take into consideration the favorable effect on the cost picture that would be produced by Hartwell. It is interesting to examine the advantages of Hartwell from this standpoint. Evaluating navigation benefits Because of Hartwell there will not be as many open channel works required to increase the depth from 8 to 9 feet as from 7 to 9 feet. This will save in initial cost. additional foot of Secondly, the effort and cost to artificially maintain 1 depth will not be as great as to maintain 2 additional feet. This will save in maintenance cost. It is estimated that the savings in the cost of channel work will be $1,000,000 and the savings in annual cost of maintenance, $100,000. Capitalizing the annual savings in maintenance and addding to this the savings in initial cost we find that the Hartwell project will benefit navigation to the extent of $4,000,000. HARTWELL AND RECREATION The "pursuit of happiness" cannot be neglected in the over-all summation of our project. While the project will be attractive to the people of South Carolina and Georgia (5 million population) we are considering its recreational attractions within a hundred mile radius of the project. Within this radius the population of North Carolina has been excluded because of competitive lake and park districts in that area. Within the 100-mile zone there are 2.18 millions of persons. It encompasses the larger cities of Atlanta, Greenville, Spartanburg, Greenwood, and Athens. Site advantage It is worthy of notice that the Hartwell project is contiguous to some of the most popular vacation lands in America. The northern sections of Georgia and South Carolina and western North Carolina have for generations been sought by the southern vacationer for rest, health, and diversion. Modern highways now bring into this section thousands of tourists annually from all parts of the United States. The Hartwell project is in the foothills of the "Smokies," a range of unparalleled scenic beauty. The providing of a lake resort in this general section of the country will add greatly to its tourist attractions. The market According to Department of Labor statistics about $25 per person will be spent on recreation on the basis of the per capita income of the people in the area. This means therefore that there should be about 50 million recreational dollars expended in which Hartwell will share. Hartwell is well adapted to recreational development because there is only a small fluctuation in the level of the lake due to power demand. Evaluating recreational benefits It is interesting to note that on the Tennessee Valley Authority lakes, a recreational industry valued at $5,000,000 annually has developed. This is represented by vacationers' subsistence, boat rentals and operations, fishing gear, etc. If 4 cents of the per capita vacation dollar in the zone is spent at Hartwell, a $2,000,000 industry will develop at the site. It is impossible to accurately evaluate those intangible benefits that will accrue to the area population in health and morale because of access to a large body of water and the recreational opportunities incident thereto, however, it is conservatiely estimated that $2,000,000 of the initial cost of the Hartwell project may be allocated to recreation. HARTWELL AND THE NATIONAL DEFENSE The simple facts in this proposition are: (1) No coal is mined in Georgia or South Carolina in commercially significant amounts. (2) Commercial petroleum production does not exist in these two States. In addition to this, there are serious doubts as to the inexhaustibility of this product. (3) These basic fuels, upon which rests a large part of the economy of this area, must be imported. (4) In the late war great expenditures and considerable hazards had to be undertaken to continue the flow of these materials into the area. (5) We have seen in the coal industry how a large portion of our industrial plant can be paralyzed because of operating difficulties in the coal fields. The area is invaluable to national defense and the installation of this powerproducing resource will lessen dependence on outside sources. Acting Chairman Seavey of the Federal Power Commission, in a letter to the President on March 29, 1939, said: "Meritorious water-power developments are of special significance to national defense * they provide a source of dependable power which would almost certainly be of great value in a war emergency. Power from Clark Hill project would thus be available for supplying the increased power load during war as well as the expanding market in the region of the project. It would make possible the establishment of war industries in that region, or, in the alternative, would provide power for transmission, by relay, to distant industrial centers." We believe the same reasoning applies to Hartwell now. HARTWELL AND POWER The Hartwell project will provide 177,500 kilowatts of installed capacity resulting in 384,000,000 kilowatt-hours of annual energy. Is this additional power needed in the area? Can it be used? We say that it is and can. The facts speak for themselves. Electric requirements Business Week says: **** * the demand for electric power is now touch and go in many parts of the United States" (July 31, 1948). * the Nation's appetite for power seems almost insatiable" (April margin between power supply and power demand (in the Southeast) will be very thin next year" (December 4, 1948). The Federal Power Commission, in its "Power Market Survey-Southeastern Region" (March 1947), has considered this question by analyzing the past, present, and estimated future power requirements. From this report we find that the demand for electric power has increased greatly in the past 10 years and the evidence points to its continued growth. Let's look at the record. What about the power supply? In Georgia and South Carolina there is at present an installed capacity of 1,510,787 kilowatts. However, installed capacity is quite different from assured capacity. From installed capacity there must be deducted the effects of stream flow variations, developed storage, load characteristics, methods of operation, and reserve capacity to assure continuity of service. New plants are now proposed and building in the area which will improve the present deficiency of assured capacity. Future electric energy consumption, as estimated by the Federal Power Commission, indicates that large increments to existing capacity will be needed. These estimates assume full coordination (i. e., interconnections of sufficient capacity and adequacy of transmission voltages) within the two areas but partial coordination among the several power supply areas in the Southeastern region. Based on recent preliminary studies, the Federal Power Commission has stated that the foregoing figures will be revised considerably upward because of the rapid growth in the use of electric power. The predicted demand The future electric power requirements as estimated by the Federal Power Commission, might well raise the question: what is going to become of all those kilowatt-hours? It is therefore appropriate to consider the requirements of the large user categories in this connection. Residential and farm requirements It is estimated that about 50 percent of the dwellings in the area have electrical service. The rise in the per capita income of the area, in addition to the fact that electric rates are low, create an increasing demand for energy. The many new users of electricity as load builders must be taken into account such as air conditioning, freezers, heating, improved farm appliances, etc. In short, it is estimated that the average customer for electric energy will use (by 1970) 2,760 kilowatt-hours annually, which is more than double the amount he presently uses in the area. This estimate is very conservative. Some authorities believe that the modern home wil afford a market of 6,000 kilowatt-hours annually and that within the reasonable future, the average farm load will approximate 8,000 kilowatt-hours annually. Commercial requirements Commercial power requirements are expected to be more than three times greater in 1970 than they were in 1944. The large increase in the past, in this type of consumption, has followed consistently the increase in dollar volume of retail sales. Improved lighting techniques, installation of store air conditioning units, promotional lighting, modernized street lighting systems, constitute the principal future requirements. It should be kept in mind that several large metropolitan areas are in this section as well as many sizable communities and towns. Industrial requirements The Federal Power Commission has estimated that the industrial power requirements of the area by 1970 will be twice as great as the 1944 load. This is a progressively rising figure, and the estimated loads were arrived at after an objective consideration of the economic factors and trends of the area. Coupled with this is the tendency for private generators to increasingly use central stations in view of rising fuel costs. A few other considerations The manufacture of aluminum from its oxide calls for large blocks of electric power. It is known that this industry is seriously considering an area location upon the presence of available power. The manufacture of worsteds and woolens in the area, already a growing industry, will be accelerated by the providing of additional supplies of energy. Bonding of plywoods by radio frequency heating, electric are furnaces, welding, brazing, infra-red heating, resistance furnaces are integral to the growing industrial structure of the South. The presence of sufficient power will be a tremendous step forward in the achieving of a finished goods economy in the area. The Hartwell project will supply an installed capacity of 177,500 kilowatts. Evaluating power benefits In determining the value of the hydroelectric energy produced at the Hartwell project, it is assumed that the value of this energy will be equal to that of comparable energy from a steam electric plant. The annual value of the power therefore is $4,875,000 based on $18.75 per kilowatt installed capacity, plus 3.4 mills per kilowatt-hour output, plus the value of the increase in prime energy at Clark Hill resulting from increased stream flows from the Hartwell project. No value has been assigned to the secondary power because as to the doubt of its marketability. Capitalizing the annual benefits from power, we find that it is worth $100,000,000. Cost of Hartwell project In House Document No. 657 the cost of the Hartwell project was estimated at $33,687,000 but this was based on 1938 construction cost index. Today, the estimate, due to increased construction costs, is $68,500,000. The annual charges to cover interest and amortization (based on a life of 42 years), maintenance and operation are now estimated at $3,191,000. The annual benefits from flood control, navigation, recreation, and power are estimated at $4,065,000. This results in an annual profit from the project of $1,874,000 or a net return of 2.75 percent on the total estimated cost of the project. The Hartwell project not only has great social and economic value but it will pay for itself, with a benefit-to-cost ratio of 1.6 to 1. ADDING IT ALL UP Flood control The frequency with which the rich botton lands are flooded will be reduced and thus permit their cultivation. Twenty-five million dollars of the initial cost of the Hartwell project should be allocated to flood control. Navigation The navigable depth of the Savannah River will be increased and the cost of annual maintenance of the navigation project will be decreased. The value in providing the additional depth permits the allocation of $4,000,000 of the initial cost of the Hartwell project to navigation. Recreation The benefits in health and happiness to a potential population of 3,000,000 permits the allocation of $2,000,000 of the initial cost of the Hartwell project to recreation. Power The project in benefiting flood control, navigation, and recreation will produce hydroelectric power. The value of this power will be sufficient to pay for the cost of the entire project, and has a capitalized value of $100,000,000. Mr. BROWN. Mr. Chairman, Congressman Preston, of Georgia, has been here all day but I do not see him now. He would like permission to file a statement later on in favor of the project. Mr. DAVIS. It may be filed. Mr. BROWN. Mr. Chairman, I have a statement from Hon. Lee E. Carter, executive secretary, Hart County Chamber of Commerce. I would like to file this statement on behalf of Mr. Carter at this time. The CHAIRMAN. Is Mr. Carter in the room? Mr. CARTER. Yes, sir. The CHAIRMAN. Have you any other occupation besides being secretary of the chamber of commerce? Mr. CARTER. Yes, sir; income-tax consultant. The CHAIRMAN. Get out of here as soon as you can. [Laughter.] You may make any additional statement you like, sir. Mr. CARTER. Thank you, Mr. Chairman. However, I think the statement covers our endorsement of this project. |