BIG SANDY RIVER IMPROVEMENT My name is Herman Mueller. I am a resident of St. Paul, Minn., and represent the Port Authority of St. Paul of which I am secretary and general manager. I have been employed since the port authority was created in 1932. Prior to that time I had many years of experience in traffic and transportation matters, including 13 years as traffic director of the St. Paul Association of Commerce. I was closely identified with the movement that resulted in the canalization of the upper Mississippi River. At the hearing on the Big Sandy River project held on September 10, 1945, I understand that a brief statement, which I had prepared in behalf of the port authority, was submitted for the record. It was not possible for me to come to Washington at that time. I now wish to briefly supplement that statement. As disclosed in my former statement, the Port Authority of St. Paul is a municipal commission charged with the management of St. Paul's municipally owned river terminals and with the duty to promote the industrial and commercial advancement of the community. Our municipal river docks and facilities represent an investment of approximately $750,000. They are provided for the sole purpose of placing St. Paul and tributary territory in position to secure the benefits of low-cost water transportation. Our docks are adequate to handle large tonnages of both packaged and bulk freight. The open dock area, especially provided for the handling of coal and other bulk freight, has a frontage of over 1,600 feet and we own the adjacent additional frontage of several thousand feet for further expansion. Coal can be transferred direct from barges to cars and trucks and there is a water-level paved street from the terminal to the business center of the city. As is well known to the Corps of Engineers, the Twin Cities of Minneapolis and St. Paul, despite the handicaps of distance and high freight rates, are a large manufacturing and distribution community. Our raw materials, fuel, and finished products must be transported long distances. Under the present high levels of rail and truck rates this is a real handicap. We are at a serious disadvantage in competition with cities to the east and south of Minnesota. That is why we worked so hard, over a considerable period of years, to secure the 9-foot channel in the upper Mississippi River, which happily became a reality in 1940. You, of course, have copies of, or access to, the periodical reports issued by the St. Paul district office which show the enormous increase in tonnage moving via the river since the 9-foot channel was completed. The measure of transportation charges wields great influence in determining' sources of supply and distribution. I well remember the time, not so many years ago, when the cities of Minneapolis and St. Paul consumed about a million and a quarter tons of Illinois coal annually. That was exclusive of railroad fuel and the movement was entirely by rail because we then lacked dependable river navigation. Then a slight change in the amount and relationship of rail rates practically eliminated this substantial movement-it dropped to less than 100,000 tons annually. This fact conclusively illustrates how a minor change in transportation charges influences the movement of heavy commodities such as coal. The diversion from Illinois was to Appalachian coal shipped via the Great Lakes. Since the completion of the 9-foot channel in the upper Mississippi River in 1940 it is again profitable for consumers in the Twin Cities to buy Illinois coal. In confirmation I cite the fact that by 1942 the movement of Illinois coal to the Twin Cities by river had developed to over 650,000 tons. During the war years of 1943 and 1944 this movement dropped off some for various reasons which have no bearing on the economic aspect of the situation, but since the termination of hostilities the movement is showing a rapid increase and there is every indication that this trend will continue. Improvement of the Big Sandy so that we will also have access by water to that important field will surely increase the river movement of solid fuel to the Twin Cities by river. As indicated in my former statement, the Twin Cities are a large market for coal. We are far removed from all sources of this essential commodity so that the cost of transportation adds very materially to our cost of living and the production of our manufactures. The better grades of coal are therefore more desirable, because more economical, in our community than in most areas where our principal competitors are located. The delivered cost of coal in the Twin Cities is so high that our industries are seriously handicapped. This is readily understood when a glance at the map shows that our principal competitors are much nearer to both the coal fields and the areas of dense population. We must, therefore, cut our transportation costs wherever possible. 'In his statement made at the hearing held in Washington on October 22, Mr. O. L. Alexander, president of the Pocahontas Fuel Co., correctly stated that "commerce has always followed water transportation. The Misissippi Valley is taking on a new life with the opening of the river channels and installation of modern transportation and loading and unloading facilities." That is an absolutely correct appraisal of the situation. Since the end of the war the Twin Cities are receiving an unprecedented number of inquiries for industrial sites, both improved and unimproved. We cannot begin to fill the requirements for the former. One of our principal objectives in urging the 9-foot channel in the upper Mississippi River was to assure standardization of operations and carrying capacity with the canalized Ohio River. We had in mind the movement of coal and other heavy commodities to and from the Ohio River Valley and the fact that attractive costs for such movements can only be had if there is uninterrupted through movement without necessity for transfer of lading. We are vitally interested in the extension of the 9-foot channel system to include the Big Sandy River and the Levisa and Tug Forks and recommend that these improvements be undertaken at the earliest possible date. Respectfully submitted. H. MUELLER, Secretary-General Manager, Port Authority of St. Paul. BIG SANDY RIVER IMPROVEMENT Statement in support of, by Herman Mueller, secretary-general manager, Port Authority of the City of St. Paul. The Port Authority of St. Paul is a municipal commission created and existing under and by virtue of the laws of the State of Minnesota, with jurisdiction over the municipally owned river docks and terminal facilities in St. Paul. By statute, the port authority is specifically charged with the duty to foster the general welfare of the port district, increase the volume of our commerce, and promote the efficient and economical handling thereof. These river docks and facilities, financed through municipal bond issues, are for the sole purpose of placing our community and tributary territory in position to secure the benefits of low-cost water transportation. They are adequate to handle large tonnage of both bulk and package freight. Similar publicly owned facilities are available in Minneapolis and at other points along the upper Mississippi River. We are, therefore, seriously and directly interested in any economically sound proposal to extend the navigation channel of the Mississippi River system of inland waterways. The Twin Cities of Minneapolis and St. Paul consume in excess of 2,000,000 tons annually of bituminous coal. This is exclusive of railroad fuel. Because of our climate there is a very large domestic, as well as industrial, demand for high-grade fuel. We are far removed from all coal fields and the cost of transportation is a major factor in the delivered price of that essential commodity. Because of access to low-cost transportation on the Great Lakes (the rail distance from Duluth to the Twin Cities being only 150 miles) our people have been able to secure the larger part of their coal from the Appalachian fields. The low cost of lake movement, despite much greater distances, enabled the Appalachian coals to reach our market in competition with rail movements from Illinois. Because of this fact we have always been recognized as a highgrade coal market and naturally are interested in any reasonable proposal that will reduce the cost of transportation from the sources of all high-grade fuel. As is well known, the Twin Cities, despite the handicap of distance, and high freight rates, are a large manufacturing community. Our raw materials and finished products must be transported long distances. We are thus placed at a serious disadvantage in competition with cities to east and south of Minnesota. That is why we worked so hard over a considerable period of years to secure the 9-foot channel in the upper Mississippi River, which happily be came a reality in 1940. Obviously, coal is one of the principal commodities that now reaches the Twin Cities and other upper Mississippi communities over that improved waterway. In past years when transportation rates and mine costs for coal were on a much lower plane than today, the handicap of our industries, to which I have already referred, was not so severe as it is today. Under present conditions, and looking into the future, we must take advantage of every possible opportunity to reduce the cost of assembling materials and distributing the products of our factories. An all-water route, via the Mississippi and Ohio Rivers to the Big Sandy Valley, will give us a strongly competitive route and unquestionably reduce the cost of that high-grade coal delivered in our bins. We, therefore, heartily endorse the proposal to extend the 9-foot navigation channels in the Big Sandy River and the Levisa and Tug Forks as proposed by the Big Sandy Valley Association, Inc. H. MUELLER. Mr. KERPER. I want to call attention to a letter that I just received while I was in this city, directing attention to the proposed increase of 30 cents a ton on coal throughout the entire area. (The letter referred to is as follows:) Big Sandy River improvement. Mr. J. A. KERPER, PORT AUTHORITY OF THE CITY OF ST. PAUL, Secretary, Dubuque Chamber of Commerce, Dubuque, Iowa DEAR JOHN: When writing you yesterday in re the above, I neglected to mention the application of the railroads for a general increase in freight rates. As pointed out by Mr. Merril, the application, if granted, will increase the rail rates on coal from the Appalachian fields to points on the upper Mississippi River 30 cents per ton and a like increase will be applied to the movements via rail and lake. This would make the margin in favor of barge movements from the Big Sandy still more attractive than set forth in their recent booklet and, of course, is an additional strong argument for us to use in supporting this project. Yours sincerely, H. MUELLER, Secretary-General Manager. Mr. KERPER. I have likewise been directed by Mr. W. W. Morse, businessman and executive of Minneapolis, to present his support of this project, which I leave to read in its entirety. I am 81 years old and have spent practically my whole business life at Minneapolis, Minn. I have been seeking the benefits of river transportation for the upper Mississippi Valley for many years. I was the first operating manager of the upper Mississippi division of the Inland Waterways Corp. from 1927 to 1933, and during my term of office secured the construction, first of the Minneapolis river-rail terminal and later of the Minneapolis river-rail coal terminal. Since the completion of the upper Mississippi, 9-foot state, in 1940 I have been consistently seeking to secure high-quality eastern coal by river from the Great Kanawha Valley for my own personal use at Minneapolis but have at no time found such tonnage readily available for the reason that substantially all of the available river coal tonnage from that district is absorbed between the mines and Cincinnati, leaving only chance lots to be picked up for delivery to upper Mississippi destinations. I have been seeking 30,000 tons for my 1946 needs for the past 4 months, but have, so far, been unable to locate same. This convinces me that until further areas of these specialty coals are made available for river transportation our needs for these coals can never be secured and, as I know the situation, the southern districts of West Virginia and Kentucky are the only ones in existence which can meet this situation. As a matter of fact the Twin Cities of Minneapolis and St. Paul now consume over 2,000,000 tons per year of this type of coal, which reaches them via the lake docks and a roundabout expensive haul from same into our cities. There is now being consumed in the upper Mississippi territory a total of 16,000,000 tons per annum of this type of coal, at freight rates varying from $4.30 per ton to Davenport, Iowa, to $5.55 per ton to Minneapolis. By means of a very inefficient use of their river, including a charge of 20 cents per ton for transfer at Cairo out of Ohio River barges into upper Mississippi River barges at Minneapolis into railroad cars, I have from time to time been able to secure a river cost on small shipments of Kanawha district coals into Minneapolis at $3.75 per ton, as against the rail rate of $5.55 per ton, thus affecting a net savings of $1.80 per ton. I am convinced that with effective operating through tows out of the Big Sandy River into Minneapolis this cost can be reduced at least 50 cents per ton, making a net savings of $2.30 per ton. From my knowledge of industrial conditions in the midcontinent area I am convinced that a diversified metallurgical industry can never be developed in this area until lower costs transportation on these special-quality coals is secured. Based on my experience with the Inland Waterways Corp., I am convinced that a substantial back-haul movement of agricultural products and other commodities will rapidly develop with the up-river movement of coal. I, therefore, want to urge that your committee pass favorably on this project and enable our people of the great Northwest to secure the benefits of these coals at the lower costs provided by river transportation. Respectfully submitted. MINNEAPOLIS, MINN. WILLARD W. MORSE. And lastly I wish to read for the record a telegram directed to the Rivers and Harbors Committee of Congress from Mr. A. J. Smaby, general manager of Midland Cooperative Wholesalers, which indicates clearly the interest manifested in this project and concurred in by all of the people in our area. The telegram is dated April 3, directed to the Rivers and Harbors Committee, in care of M. L. Garvey (reading): On behalf of some 200,000 member families of 350 member cooperatives in Minnesota, Wisconsin, and northern Iowa, Midland Cooperative Wholesale strongly urges support by Rivers and Harbors Committee of proposal for development of Big Sandy waterway in West Virginia. Such development would mean great improvement in Nation's transportation efficiency and would benefit millions of people in the Northwest as well as other areas. MIDLAND COOPERATIVE WHOLESALE, It is important to note that practically all principal cities on the upper Mississippi such as Keokuk, Burlington, Muscatine, tricities of Rock Island, Davenport, and Moline, Clinton, Dubuque, Winona, La Crosse, St. Paul, Minneapolis, have expended millions of dollars of local funds in the construction of river rail terminals for the handling of package and bulk cargo and are prepared to expend additional large sums of money in providing ample and modern storage and unloading facilities for the handling of smokeless and high volatile byproduct coal, as soon as they have assurance that such coals have been made available at this time for barge movement, hence the interest of the entire area in the development and canalization of the Big Sandy, providing access to a tremendous supply presently not available because of the high cost of transportation. The former statements referred to and which are made a part of this presentation indicate clearly that the Mississippi Valley area is entitled to and must have economical access to this coal, and it is the urgent desire of all the communities embraced in the presentation that the project already approved by the United States Board of Engineers have favorable consideration at the hands of your committee. Thank you, gentlemen. Mr. HOBSON. I would like to present at this time, Mr. Weston B. Grimes, of Cargill, Inc., of Minneapolis, Minn. Mr. PETERSON of Georgia. You may proceed, Mr. Grimes. STATEMENT OF WESTON B. GRIMES, CARGILL, INC., Mr. GRIMES. We are in the grain business, which may seem a little strange among these coal people. We favor the development of the Big Sandy River because it is our considered opinion that we will be able to move about half a million tons of grain per year into that area for distribution in the Shenandoah Valley and the Carolinas. We operate our own waterway equipment and we have grain-handling facilities at Minneapolis, Kansas City, St. Louis, Gunthersville, and several other places on the inland waterways system at the present time. We e serve this territory of the Shenandoah Valley and the Carolinas at present by railroad from Buffalo, Toledo, or Chicago. We have been seeking for several years an outlet via water to the territory. We think that this is the answer to the problem. Except to again mention the tonnage figure, which we believe to be about 112 million tons a year, that is all I have to say. Mr. HOBSON. I would like to introduce at this time Mr. E. L. Mullins, of Local Union No. 7916, Lookout, Ky. Mr. PETERSON of Georgia. You may proceed, Mr. Mullins. STATEMENT OF E. L. MULLINS, REPRESENTING THE UNITED MINE WORKERS OF AMERICA, LOCAL UNION NO. 7916, LOOKOUT, KY. Mr. MULLINS. I am one of Lewis' coal dealers. I work at the base of the coal, you might say, about 10 miles under the ground. I represent my local of the Semet-Solvay plant at Henry Clay, Ky., and I was sent here to speak for them through a resolution. I have a resolution I would like to read for you: UNITED MINE WORKERS OF AMERICA, LOCAL UNION 7916 HENRY CLAY OPERATION, LOOKOUT, KY. The Semet-Solvay interests began to operate coal mines at Marrowbone Creek, in Pike County, in the near 1916, and continued the operation until the year 1938, a period of 22 years. During this period the major portion of the coal produced at the Marrowbone mine, commonly known as Henry Clay, was shipped to the coke ovens at Ashland, Ky. The men who worked in the mines here during this long period had mostly been reared in the vicinity of the mines, and in a great many instances owned their own property, had their children in schools in the neighborhood, and in many other ways had firmly established roots here on Marrowbone and in the surrounding area. Most of them had plans to stay here, and they were looking forward to a reasonable degree of security, depending, of course, upon the continued operation of the mine at Henry Clay by Semet-Solvay Co. In the latter part of the year 1938, the mine at Henry Clay was closed; and the ovens at Ashland and Ironton began to get their coal from other places, where |