fully employed in civilian construction for the next 8 or 10 years. In my opinion, it would be very unfortunate if the Government would go into the labor and material markets, where a definite shortage exists in both fields, and compete with private enterprise, except only in cases which are imperative beyond question and necessary to proper functioning of the Federal establishment.

I am in favor of the improvement and development of our waterways when it contributes to the public good and the expenditure is compatible with Federal income.

In opposing projects of this nature at this time, I could well use the words of Bernard Baruch and Jesse H. Jones in their respective statements opposing the British loan. The opinion of these gentlemen on fiscal matters is respected not only in this country but throughout the world. In essence, they have stated that it is time that we halt public spending and take an accounting of ourselves, and that bringing the Federal Budget into balance and terminating deficit spending are absolutely necessary now to preserve the financial integrity of our country.

We cannot afford to continue printing and spending money indiscriminately. Every time we spend an additional billion of borrowed money we reduce the buying power of our dollar, and if we go on spending and lending and giving and losing, without regard to how we are going to pay back the money that we have borrowed from our people, it will not be long until our dollar will be as depreciated as the currency of other countries that have overspent. Deficit spending is a definite contribution to inflationary processes.

Our national debt today is approaching $300,000,000,000 and is in excess of $2,000 for every man, woman, and child in the United States. It is time that we stop and think where we are going, that we take stock of our resources, of our earning capacity, of how we are going to service our existing debt before we try to increase it by continuing deficit spending.

There is one fact we should constantly keep before us. The major portion, if not the entire burden, of our huge national debt, the burden of all Federal spending, wasteful or otherwise, falls upon the backs of the men and women who work with their hands. All labor in industry-on the farm, in the mines, in the forests-in the final analysis pays the bill. All the debt juggling and all the high-sounding phrases will not change the picture one iota if we are to remain a solvent nation.

Mr. PETERSON of Georgia. Mr. Ellis, thank you for a very clear and important statement.

I would like to ask this question: This, as I understand it now, puts every member of the West Virginia delegation on record as opposing this project?

Mr. ELLIS. That is my information, yes, including both Senators, I am informed.

Mr. DONDERO. The point, I think, you tried to convince this committee about is that you do not believe the Government is able to beat simple arithmetic.

Mr. ELLIS. It can be implied in that manner, Mr. Dondero.

Mr. PETERSON of Georgia. We will now hear from the distinguished gentleman from Virginia, Congressman John W. Flannagan. You may proceed, Mr. Flannagan.

STATEMENT OF HON. JOHN W. FLANNAGAN, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF VIRGINIA

Mr. FLANNAGAN. Mr. Chairman, the project which your committee is now considering involves proposed canalization of the Big Sandy River and a portion of its Tug and Levisa Forks. While no part of this canalization would be in my congressional district, a substantial portion would be immediately adjacent to it. The Levisa Fork rises and flows for 34 miles in my district and a part of the Tug Fork forms the boundary between Virginia and West Virginia in my district. The interests of my constituents are therefore closely connected with this project. This is true, not only for geographic reasons, but, even more important, for economic reasons.

The proposed canal, according to the report of the Board of Engineers, would have an estimated movement of 8,300,000 tons of coal annually. No claim is made that there will be any appreciable traffic on the canal in commodities other than coal. Within my district there are located vast reserves of high-volatile coal which are not greatly different in quality from those in the Big Sandy Valley which would be served by this canal. These coal deposits in Virginia are being extensively mined, production in 1944 being in excess of 10,000,000 tons, and it was about the same in 1945. In 1944 over 1,500,000 tons of this coal moved to western and northwestern markets in competition with Big Sandy coal. These Virginia mining operations afford employment for a large number of coal miners.

If this project is authorized it may seriously prejudice coal mining in my district. The mines in Virginia are located too far from the waterway to be able to use it. At the present time the coal freight rates from Virginia mines are in many instances the same as or closely related to existing freight rates applicable to coal moving out of the Big Sandy Valley. The construction of this canal will place coalmining operations in Virginia at a competitive disadvantage with mines which can use it. This unnatural advantage will be paid for by these Virginia operators as well as the taxpayers in general. I do not believe that public funds should be used for such a purpose. This is especially true where it appears that there is little if any evidence that savings effected by water movement of coal are passed onto the public. The consumers' price of coal is generally based on rail transportation cost to destination.

It seems clear, therefore, that construction of this canal will close, at least partially, markets which are now available to Virginia producers. That will means less coal production, which in turn will cause substantial loss of employment for coal mines, with consequent loss of purchasing power. It might be argued that what is lost in my district will be gained in the Big Sandy Valley. Here again, why should public funds be used for that purpose?

Another serious aspect of this matter is that use of the canal will mean diversion of business from the railways and that will also entail reduction in rail employment. Many railroad employees in my district and elsewhere face the prospect of losing their jobs if this canal hauls anything like the amount of coal claimed by its proponents.

Then too, the rail carriers are large taxpayers. In 1945 the two railroads the Chesapeake & Ohio and Norfolk & Western-who

would be mainly affected by the canal, paid many millions of dollars in Federal income taxes alone. If this waterway handles as much coal as the Board says the tax loss to the Federal Governmentestimated $4,395,000 railroad income taxes on diverted businessadded to the $4,190,000 annual carrying charges, would wipe out any gross savings which the canal might effect. And if large tonnages do not move over the canal it is an economic failure and the taxpayers have a white elephant on their hands.

Mr. Chairman, I do not believe there is any earthly economic justification for this proposed canal. The coal operators in that territory have ample railroad facilities. This canal would merely parallel present railroad tracks.

I thank you.

Mr. PETERSON of Georgia. Thank you very much, Mr. Flannagan. I would like to state that Mr. Flannagan is chairman of one of the most important committees of the House of Representatives, the Agriculture Committee, and this committee is glad to have him come before us and give us his able views on this project.

Mr. LAWSON. Mr. Chairman, I now present Mr. Martin H. Miller, national legislative representative of the Brotherhood of Railroad Trainmen.

STATEMENT OF MARTIN H. MILLER, NATIONAL LEGISLATIVE REPRESENTATIVE, BROTHERHOOD OF RAILROAD TRAINMEN

Mr. MILLER. Mr. Chairman and members of the committee, I am Martin H. Miller, national legislative representative of the Brotherhood of Railroad Trainmen. Our Washington office is located at 10 Independence Avenue SW.; the general offices of the brotherhood are located in the Standard Building, Cleveland, Ohio. Mr. A. F. Whitney is president of the brotherhood.

The Brotherhood of Railroad Trainmen is the largest of the railroad train service labor organizations and represents conductors and brakemen in road passenger, freight and yard service, train baggagemen, yardmasters, dining-car stewards, switchtenders, car-retarder operators, and operators of intercity busses.

The Brotherhood of Railroad Trainmen, as an organization of railroad employees and as citizens, are vitally interested in all matters of policy affecting transportation. We are especially interested in any project to be financed by the Federal Government to provide for additional means of transportation in areas where there are at present adequate transportation facilities.

Your committee now has under consideration the report of the War Department Board of Army Engineers for Rivers and Harbors for development of the Big Sandy River and its tributaries, the Tug and Levisa Forks. If we understand the law correctly, the Board of Army Engineers in submitting its recommendations for improvement shall have in view the amount and character of commerce existing or reasonably prospective which will be benefited by the improvement, and the relation of the ultimate cost of such work, both as to cost of construction and maintenance, to the public commercial interest involved, and the public necessity for the work and propriety of its construction, continuance or maintenance at the expense of the United States. If the Big Sandy project is to rest or fall upon such a provision,

then in fairness to all of the people of the United States the project must fall for it surely cannot adequately meet such requirements.

According to the testimony of the officer for the Board of Army Engineers, it is anticipated that the barge line which may be able to use the development may have available 8,300,000 tons of coal per year. At savings in freight rates of $6,700,000 annually, the cost of construction is, and I think very conservatively, estimated at $82,300,000, with the annual maintenance and interest charge cost of $4,190,000. It is rather peculiar that the estimate of cost of maintenance of $600,000 annually is the same estimate that was based upon the annual maintenance cost a couple of years ago when the original cost was at that time only $65,000,000. If the development costs are up approximately 25 percent, it would naturally seem that the maintenance cost should also be increased.

There has been no substantial claim that there are not adequate transportation services available for any and all commodities which may be offered for transportation. It was rather amusing to listen to the Army officer testifying to the fact that there was a large deposit of coal across the Levisa and Tug Forks from the railroadsthe Chesapeake & Ohio and the Norfolk & Western-and from his statements it just seemed as though the only possible way to get that coal out into the markets of the Central States was for the Federal Government to spend over $82,000,000, with an annual cost of almost $5,000,000, whereby barges can take coal from that particular deposit to the Central States, where it is expected that St. Louis, Chicago, St. Paul, and Minneapolis may be developed into industrial centers by being provided with lower freight rates. Perhaps someone should. advise the Board of Army Engineers that railroads have been able to build bridges across other streams of water and there is a possibility that the two railroads serving that territory will build bridges and construct their tracks into this coal deposit when the same is ready for development.

I am sure that if your committee will take the time to investigate the history of the territory which is to be served by the proposed development, you will find that the building of the railroads into this region was responsible for the development of the coal and other mineral deposits. Within my knowledge there has been no showing that the railroads have refused to serve any new development.

I am sure you will find, as a matter of fact, that the railroads in this territory, the same as in any other territory in the United States, have always been in the forefront in assisting in the development of the natural resources. The ability to serve the people in the transportation field has made the railroads of the United States one of the greatest transportation systems in the world-more dependable and reliable than any other method of transportation. I think that the members of his committee-yes, also the proponents of the proposed development-will agree that the railroads of the United States met every expectation of them in the recent war. I do not believe you will find an instance of where there was any delay in the movement of troops or in the shipment of war material throughout the darkest hours of our recent emergency. Do you know the reason why the railroads were able to measure up to their full responsibility in our heavy wartime traffic? It was because they had

the plant and the experienced personnel to handle such traffic emergencies, all of which should be on hand and available for any future emergencies. It just seems to me that if the Federal Government keeps on building a waterway here and a waterway there, at public expense, which is bound to take traffic from the railroads, we cannot expect the railroads to maintain the plant and experienced personnel necessary to meet future emergencies.

In the instance of the Big Sandy development, the Board of Army Engineers seemed to pin their judgment in recommending it on the information that there is an undeveloped deposit of coal, and seemed to be content that since it is not now being hauled by railroad, if a waterway is built and the deposit developed and the coal hauled by barge line, it would not take business away from the railroads. Of course, we all know that the coal mines now in operation on the Chesapeake & Ohio, and the Norfolk & Western, will eventually be worked out and unless they can secure the business of the undeveloped deposits their traffic will eventually decline, which will also affect the traffic of the other railroads which assist in hauling the coal to the markets of the Central States, or elsewhere where needed.

As mentioned before, the railroads proved to be efficient transportation in our war effort; first, because they were dependable and, second, because they provided fast transportation and carried the traffic, both in winter and in summer, in drought and in rainy seasons.

During the war we could not wait for military shipments to travel by the slow-moving river barges, which operate in fair weather. We used the railroads, and in another such emergency we will use the railroads again, if we have not provided so many other forms of subsidized transportation that the railroads cannot keep up the plant and experienced personnel on hand and available.

The proponents failed to give adequate consideration to the fact that the rivers-the Ohio, Mississippi, Missouri, and Illinois-are frozen over in the winter months and traffic is suspended during that period. Some testimony was to the effect that local miners' unions were favorable to the Big Sandy project; I do not know why they should favor it. The railroads have been able to handle all the coal they mined and will be able to handle all they mine in the future; and in addition to handling the coal, the railroads will consume large quantities of the coal. So, along with furnishing transportation, the railroads also are big customers for the product of the coal miner.

I am sure that the railroads and other interested parties will testify as to rail, rail-river, and river freight rates. In passing on the matter of rates, it appears to me that if the barge lines were forced to do as the railroads are that is, compelled to pay all of the expenses incidental to their business operations-it would be found that the river freight rate would be equal, if not higher, than the rail rate.

We have a wonderful, efficient, and adequate transportation system in the railroads. The transportation requirements of an adequate national defense are that the Federal Government should lend every effort to make sure that our system of rail transportation is modernized and constantly improved to be in position to meet any foreseeable traffic emergency.

The development of the Big Sandy project is not in the direction of our future national defense. It is, after all, only an effort on the