Dr. A. S. Richardson, Grundy, Va. Mr. S. R. Prichard, Jr., Welch, W. Va. Mr. W. S. Kent, Grundy, Va. Mr. S. D. Woods, Grundy, Va. KENONA-CEREDO, W. VA., CHAMBER OF COMMERCE Whereas the United States district and division engineers have recommended to the Board of Engineers for Rivers and Harbors the canalization of the Big Sandy River, including its Tug and Levisa Forks, at an initial cost of $65,000,000, and an annual maintenance cost in excess of $600,000, all of which would be paid from the public funds derived from the taxpayers, including the Chesapeake & Ohio and Norfolk & Western Railway Cos., with which the waterways thus created at public expense would directly compete, to be used as a free waterway for the handling of coal and other commodities which are now being adequately handled by the railway companies above mentioned; and Whereas in view of the present public debt of the United States, the expenditures of the sums of money required to be expended to provide these facilities is entirely unjustified, particularly when the cost of the annual maintenance of this canal will greatly exceed any revenue which could possibly accrue to the United States therefrom; and Whereas the operation of the canal in direct competition with the Chesapeake & Ohio Railway Co., which has a line on the west side of the Big Sandy River, and the Norfolk & Western Railway Co., which has a line on the east side of the Big Sandy River, both of which parallel the river and adequately serve the territory east and west thereof, will result in a diversion of business from these carriers, a reduction of revenue and employment to both of them, particularly to the Chesapeake & Ohio Railway Co., which has many thousands of employees between Huntington, W. Va., and Russell, Ky., where its largest yards and repair shops are maintained, is obviously contrary to the public interests and particularly contrary to the interests of the above-named rail carriers and their employees. Whereas the volume of tonnage necessary to justify construction of facilities for dumping railroad cars into barges is larger than the volume of tonnage that would foreseeably move to any one rail junction point on the proposed highway. Rail haul up or down the proposed waterway to a central loading point would, therefore, be necessary. The probable freight rate for such movement would be little, if any, lower than the applicable rate to the Ohio River and certainly not lower than the rate for similar rail haul in competitive districts. Destruction of the existing competitive advantage would thus be perpetuated; Now, Therefore be it Resolved, That the Directors of the Ceredo-Kenova Chamber of Commerce of Wayne Country, W. Va., declare themselves unqualifiedly opposed (1) to the canalization of the Big Sandy River and the Tug and Levisa Forks thereof as contrary to the public interests, and particularly to the interests of this community; (2) to employing public funds to construct and maintain the public transportation facility in direct competition with existing and adequate transportation facilties; (3) an unjustified increase in the national debt and public expenditures for the creation and maintenance of additional and unnecessary competitive transportation facilities; and be it further Resolved, That a copy of these resolutions be transmitted to the Board of Engineers for Rivers and Harbors and to the West Virginia Senators and repre sentatives and that the West Virginia Senators and Representatives be asked to oppose this project. I, Henry J. Stark, president of the Ceredo-Kenova Chamber of Commerce, do hereby certify that the foregoing is a true, correct, and complete copy of the resolution passed by the board of directors of the Ceredo-Kenova Chamber of Commerce in meeting of Monday, September 17, 1945. STATE OF WEST VIRGINIA, County of Wayne, to wit: HENRY J. STARK, President. I, Billye B. Eblen, a notary public, within and for the State and county aforesaid, do hereby certify that Henry J. Stark, whose name is signed to the foregoing instrument of writing, has this day personally appeared before me in my said county and acknowledged the same. Given under my hand this 21st day of September 1945. [SEAL] BILLYE B. EBLEN, Notary Public. NORFOLK, VA., ASSOCIATION OF COMMERCE RESOLUTION There has been proposed the canalization of the Big Sandy River from Catlettsburg, Ky., to Louisa, Ky., and Fort Gay, W. Va.; the Levisa Fork from Louisa, Ky., to Millard, Ky.; and the Tug Fork from Fort Gay, W. Va., to Sprigg, W. Va., at an estimated total cost of more than $70,000,000. The purpose of this project is to provide for the transportation of coal by barges from the Kentucky and West Virginia fields to the Ohio River over routes paralleled and served by the Norfolk & Western and the Chesapeake & Ohio Railways. Now, therefore, be it Resolved, That the Norfolk Association of Commerce of Norfolk, Va., hereby registers its definite disapproval of the Kentucky and West Virginia canal project on the principal basis that there is no necessity for its construction in view of the excellent facilities for the transportation of coal in the affected area, and because the expenditure of Government funds on such a large scale for this project is entirely unjustifiable, particularly at this time when strict economy must be observed. The foregoing resolution adopted this 10th day of November 1945 by the executive committee of the Norfolk Association of Commerce. United States Army, Washington, D. C. SIR: The proposal for the construction of canals in the Big Sandy River from Catlettsburg, Ky., to Louisa, thence via the Levisa Branch to Millard and from Louisa via the Tug Fork to Sprigg, W. Va., was considered by the executive committee of the Hampton Roads Maritime Association at a special meeting held in Norfolk on November 8, 1945. The committee, in its consideration of this matter, had before it maps, charts, and other data and also full and complete information in regard to other transportation facilities available to the area which the proposed canals would serve. It was also informed as to the amounts already expended in preliminary studies and investigations of the project and estimates of its ultimate cost. With this information before it the committee did not believe that the construction of the proposed canals was justifiable and on the other hand it did feel that the proposed construction would by the diversion of traffic from existing transportation lines adversely affect large and vital instruments of transportation which now serve this port area and it was further the consensus that the expenditures of such a large sum of Government money for the purpose of a project of such doubtful value was not in the public interest. Therefore, it was resolved that the Hampton Roads Maritime Association opposed the proposal and the Secretary wos instructed to appear at a public hearing before the Board of Engineers for Rivers and Harbors in Washington on November 13, 1945, in opposition to the project and this was done. This is to reaffirm the above position of the Hampton Roads Maritime Association in this matter. Yours very truly, Mr. PITTENGER. Are they on both branches? Mr. LAWSON. They are. H. M. THOMPSON, Executive Vice President. Mr. PITTENGER. And they are also on the Tug Fork? Mr. ANGELL. May I ask what is the basis of the opposition of these cities to the project? Mr. LAWSON. Most of those cities feel that the canal is not needed, that there are ample and sufficient transportation facilities; they feel that there would be a great waste of money. Practically everyone down there is acquainted with the fact that there is a very crooked and shallow and treacherous stream, lacking in water, and they simply honestly feel that this is an unnecessary and fantastic project. I should like also to call attention to the committee that 13 Members of Congress expressed their opposition to the Board while only 1 appeared in favor of it. Mr. Chairman, I think during the day you will find that most of these gentlemen will appear before this committee. Mr. RANKIN. I do not think so, but we would like to have the names. Mr. LAWSON. I cannot call them off to you now, but they will show up during the day. The Board's report also gives the erroneous impression that coal producers in the Big Sandy Valley are in favor of this project, since coal is the only appreciable traffic expected on the canal. These producers are the persons who it is hoped will furnish the traffic. As a matter of fact, a great majority of the coal producers in the Big Sandy Valley do not favor this project and they registered that opposition with the Board. The Board's report does not disclose that the Big Sandy Elk Horn Coal Operators Association, whose members produce in excess of 80 percent of the productive capacity of all existing mines that could possibly be served by the canal on the Levisa Fork, are opposed to it. Likewise, that does not state that many operators on the Tug Fork do not ban the canal, that in truth there is only one operator on the Tug Fork close enough to the canal to use the canal with any prospect of profit who is supporting it. In fact, at the hearing yesterday, only one coal producer in the entire Big Sandy field appeared in favor of this project, aside from a few small truck mine producers, not a single coal producer on the Levisa Fork has stated that he favors this project. No one from that area appeared yesterday, and yet that is the area from which the Board says more than 4,000,000 tons of coal will move annually over the waterway. Of the 26 companies on the Tug Fork whom it is claimed by the proponents could possibly use the canal, only 1 appeared here yesterday. Only one other coal producer spoke in support of the project, namely, the Pocahontas Fuel Co., and that company does not have a mine within 75 miles of the proposed canal. Of all the witnesses who appeared before this committee yesterday, only one, Mr. Tierney, of the Eastern Coal Corp., could put any traffic on the canal with prospect of economic benefit. No doubt this committee must also have been impressed with the fact that at the hearing yesterday there was not a single witness who lives on Tug Fork in the State of West Virginia. Why, no doubt it is occurring to you, are so many people and organizations of various stations and interests opposed to this canalization project? I shall not attempt to discuss in detail the bases of these objections, as many of the parties will speak for themselves and will call experts to deal with the technical problems involved. However, I should like to outline what those opposing this project expect to show during the time allotted to them. We shall prove that the real purpose of those who profess to want this canal is not to use it for transporting coal, but rather it is a desire on the part of one or two large coal operators to secure reduced freight rates. This is a freight-rate fight, an attempt by certain large coal operators to have the Federal Government spend $87,000,000 or more to get cheaper freight rates. In point of fact, this matter should never have reached this committee. If there is anything wrong with the rail rates they should be corrected through the orderly procedure of the Interstate Commerce Commission and not by use of vast sums of taxpayer's money. We shall prove that the Board's estimate of the cost of this project is greatly underestimated; that in the main it is based on 1940 prices of construction. We shall establish that construction of this canal will bring on economic consequences which far outweigh any possible benefits. For example, if the optimistic claims of the proponents are even approximately realized, its construction will mean an estimated loss of jobs for more than 2,500 rail and coal mining employees, which in turn will result in reduced purchasing power. Moreover, there will be substantia. tax losses to the Federal, State, and local governments. If the claims of the proponents are correct, the reduction in Federal income taxes alone of the affected railroads will, when added to the annual carrying charge on the project, more than offset the alleged gross savings which this canal could possibly effect. It should be remembered that the Federal property will not be taxable by the State and local governments and that taxes of barge lines, as contrasted with railroads, are negligible. Moreover, the canal will have a disruptive effect upon coal markets of producers who are too far from the canal to use it and who now compete with Big Sandy operators. Mr. Chairman, we shall show that the Board has used an unsound theory, the so-called "feeder-value" theory, to justify this project. We shall offer evidence of experts that these small, narrow, crooked streams are not and cannot be made into suitable channels for navigation on the scale here contemplated. Hemmed in as the waterway would be by mountain ranges, navigation would be impractical for the large volumes of coal necessary to be transported over it in order to justify it economically. Evidence will be offered as to the difficulties created by the lack of· water in these streams. Sufficient water for navigation during all or part of 8 months of the year can be obtained only by pumping water upstream from lower to higher pools, starting by pumping water out of the Ohio River. If it were not possible to take water from the Ohio, this novel proposition of the Army engineers could not have even reached the blueprint stage. Mr. COLE. How many months of the year would that be necessary? Mr. LAWSON. All or part of 8 months, depending on the amount of rainfall. On the basis of the Army engineers' own figures, at least from 7 to 10 billion gallons of water a day will have to be pumped from lower to higher pools, depending upon the number of lockages. This would be enough water to furnish every person in the city of New York, Chicago, and Boston 100 gallons of water a day. It sounds like another Passamaquoddy project. We in the Big Sandy project are very much afraid that the Army engineers are going to wear the water out pumping that back and forth. We are also concerned that the project may produce serious pollution and health problems. We were told yesterday by the proponents that the Big Sandy Valley needs the canal in order to compete with other coal fields which are accessible to water-borne transportation; that because of the lack of such transportation the valley suffers more than the country in general in normal times-the history of coal production and mining employment in this area, however, for the past 25 years as compared with the United States as a whole and with competitive coal fields shows that coal production and employment in the Big Sandy Valley has maintained a higher average during that period than the other areas just mentioned. Finally, it should be observed that the alleged benefits which may flow from the construction of this canal would be essentially private rather than public in character. Any savings in freight rates which might accrue would benefit only a few large mining companies and their consignees. Coal is usually sold on the basis of rail rate to destination, and there is but little evidence that the ultimate consumer gets the advantage of the water rate or that industry reduces the price of its product because it gets fuel cheaper. But, the proponents argue, why are the railroads complaining if we are correct in saying that no large amount of coal will move over the canal? If that be true, the canal will be an economic failure and $87,000,000 of taxpayers' money will have been wasted. On the other hand, if coal traffic in quantities claimed by proponents is hauled, this will divert business from the railroads and produce economic consequences in the form of established coal markets and loss of taxes which far overshadow any benefits that could ever be realized from the canal. Since coal consumption prior to the war was declining, due largely to expanded use of competitive fuels and water-generated electricity, |