"I have the impression, based on some experience of my own and general observation, that the docks at the Head of the Lakes with presently operating racilities can handle coal at a lower cost than the river docks and should be able to continue to do so."

I most earnestly recommend that the Board when reviewing the so-called estimates of transportation savings accept Mr. Maher's opinion and assume that dockage and storage costs at river ports will never be less, but generally somewhat in excess of those of the coal docks at the head of the lakes, which, it is well known, are the best equipped and most efficient that engineering skill has yet devised.

The return of the West Virginia Coal and Transportation Co., St. Paul, Minn., also signed by Mr. C. J. Neekamp, is another good example of the work of a zealot. This return appears to be the one designated No. 25 in Table E of Appendix C. In the answer to question 3 it is stated that the average annual coal consumption of this company is 25,000 tons, and that its storage capacity is only 15,000 tons. In the answer to Question 5 it is stated that the concern has present "annual sources of supply" amounting to 125,000 tons of West Virginia coal shippable via routes not designated, and 125,000 tons of coal from the Kanawha District shippable via "all-water" route. When, however, the West Virginia Coal and Transportation Co. come to estimating in Question 9 the annual tonnage they would ship on the Big Sandy, they show 100,000 tons annually, then a 5-year figure of 250,000, both of which are designated Southern high volatile coal, and then 250,000 tons annually of low volatile coal. If this conglomeration of figures makes any sense at all, it means that while the West Virginia Coal and Transportation Co. has thus far been successful in disposing of only 25,000 tons per year, they are in a position to obtain 250,000 tons annually, of which 125,000 tons may, when shipped, be routed "all water," presumably from a mine on the Kanawha River. This would indicate an excess of supply over actual requirements of 225,000 tons or 900%. The return does not attempt to explain why, if the company has a source of supply on the Kanawha River 5 times as great as its annual consumption, none of the coal consumed moves via the available all-water route, which I shall subsequently show, ought to be considerably less costly than from origins on the proposed Big Sandy waterway. More startling, however, than the incomprehensible variations in statements of actual consumption and available supply are the estimates in Question 9 of tonnages the West Virginia Coal and Transportation Co. will ship via barge from the Big Sandy to St. Paul. These can only be construed to indicate that company expects, which is to say hopes, in the fifth year after the Big Sandy project is finished, to move 250,000 tons of high volatile coal and 250,000 tons of low volatile coal, or a total of 500,000 tons, which represents an increase of 2000% over present consumption. And when in Question 8 the West Virginia Coal and Transportation Co. was asked what savings would be necessary to justify the use of the Big Sandy, the answer given was "any saving," but does not explain whether it was meant that the saving should be reckoned by comparison with water transportation on coal it seems to have an option to purchase from Kanawha River mines which should be less than Big Sandy costs or with all-rail or with rail-lake-rail transportation. The return also fails to show how a facility with a storage capacity of only 15,000 tons can handle 500,000 tons a year in St. Paul. The U. S. E. D. estimate in Table E for Questionnaire 25 reduces this company's estimate to 100,000 tons which still leaves unsolved the question as to why the Big Sandy project will attract such a tonnage when the Kanawha River, where the company seems to have access to river coal, has not.

My analysis of the Twin Cities tonnages is necessarily incomplete because I was privileged to see only seven of the twenty-six consumer returns listed in Table E, and of the seven only the two, viz, Nos. 22 and 25, upon which I have specifically commented, contain references to quantities of coal of as much as 50,000 tons per annum. One of those I have not heretofore mentioned, i. e. No. 22 of S. Braud Coal & Oil Co., St. Paul, concludes with the bald statement "opposed to river coal for 8 years," and altho nowhere does it indicate that the concern has ever changed its position, 30,000 tons, which is about all of its Eastern highvolatile coal requirements, were allocated to the Big Sandy, apparently by Mr. Neekamp, who signed the return as field examiner.

In concluding these remarks with respect to the Twin Cities' tonnage estimates, I would like to state that according to figures given me by Mr. J. A. Maher, of St. Paul, whom I have previously identified, the total annual consumption of coal in the Twin Cities is about 3,000,000 tons. It is drawn from the docks at the head of the lakes, from Illinois, Indiana, and Western Kentucky districts, via

all-rail, all-water, and rail-water routes, from eastern fields all-rail, and some from Arkansas and Oklahoma. A small quantity of Montana coal and North Dakota lignite is also included in the total. Table E indicates that the actual 1940 consumption of the twenty-six concerns interviewed by Field Examiners was 1,317,800 tons of high-volatile coal. The consumers' estimated tonnage to be shipped via the Big Sandy waterway is 1,613,400 tons, and the U. S. E. D. estimate 1,490,600 tons. Corresponding low-volatile figures for the twelve consumers handling that kind of coal were a little over 560,000 tons in each case. These figures, I think, demonstrate the fact that the tonnage estimates relied upon in the Big Sandy report are about the most optimistic ever made in support of a waterway project. The idea that upon completion of the Big Sandy coals produced and shipped on it will preempt the Twin Cities market to the extent of from 50 to 65% is simply incredible, and without parallel in the annals of transportation. This statement could with propriety be made even more unbelievable because the District Engineer increased the amount of high-volatile coal for the Big Sandy from the U. S. E. D. estimate in Table E of 9,760,900 tons to 15,000,000, which is a jump of about 54%. To do the same with the U. S. E. D. Twin Cities estimate would allot to the Big Sandy about 2,400,000 tons of high-volatile coal destined to the Twin Cities of 4/5 of the total consumption in that market. Revolutionary changes in sources of coal supply such as this just do not and cannot happen.

Questionnaire No. 31 on Table E, also signed by Mr. Neekamp, covers the Industrial Contracting Co., of Minneapolis, but doing business at Stillwater, Minn., and is a further illustration of the unreliability of the tonnage estimates. It deals with prospective barge business to Stillwater, Minn., and altho the questionnaire itself shows that the consumer estimated 200,000 tons of high volatile and 50,000 tons of low volatile river traffic, Table E shows the consumer's estimate to have been 400,000 tons of high-volatile and 100,000 tons of low-volatile coal, just double what the questionnaire indicates the consumer stated. The U.S. E. D. estimate allots to the waterway 200,000 tons of high volatile and 50,000 tons of low volatile, which is the same as the consumer's estimate in the questionnaire. I have made inquiry thru the Northern Pacific Ry., which serves the City of Stillwater, Minn., and developed that there is only one facility at that point for the transfer of coal from barges, and it is municipally-owned, but leased to Mr. Frank A. Raven, of Minneapolis. The name of F. A. Raven, of Minneapolis, appears on Questionnaire 31 as the president of the Industrial Contracting Co. and the person interviewed by the field examiner. When Mr. Raven leased the dock he agreed to repair the rail tracks thereon so as to permit the shipment of coal loaded into cars from barges via the Northern Pacific Railway, but he has failed to fulfill the promise and the N. P. Ry. for reasons of safety refuses to spot. cars on his tracks. For this reason the facilities leased by Mr. Raven have handled no coal for his own account and probably will not. On the dock leased by Mr. Raven there is a crane which now transfers from barges to stock piles some 800 to 1,100 tons of coal per year, destined to the Minnesota State Prison. Due to the poor condition of the tracks on the dock, this coal cannot be transferred direct from barges to cars, but must be placed in a stock pile from which cars of the N. P. Ry. are loaded on another track maintained by the railroad for the convenience of the prison, and with which Mr. Raven has nothing to do. Thus, it would appear that altho Mr. Raven now has a facility which could be rendered capable of loading coal into cars from barges, he has not done so, and consequently, as the questionnaire and Table E clearly show, his present coal business, except that which he transfers for the prison, is nil. In view of the availability of river coal, including that produced at mines on the Kanawha River and that shipped thru Huntington, as well as Illinois coals, one wonders how Mr. Raven expects to start from scratch and develop a coal business of 250,000 tons per year merely because of the canalization of the Big Sandy. The population of Stillwater is only about 8,000 and it would therefore be interesting to know who would burn this tonnage. Mr. Raven's company, the Industrial Contracting Co., is not a consumer and will have to find someone to sell it to. Table E shows the presenť transportation cost to Stillwater at $4.271⁄2, which is the same uncheckable figure used in the case of coal for the Twin Cities. Here, however, it is doubly faulty because the Industrial Contracting Co. now receives no coal from any source and consequently could not and did not state in the questionnaire its present sources of supply and the transportation cost thereof. While I personally am convinced that this company's return is the product of a well-developed imagination rather than sound reasoning and logic, it should be obvious that even if it were possible to market 250,000 tons of eastern coal in

Stillwater, a like, or more probably a greater, tonnage of coal from midwestern fields on which the transportation charges are very much less than on eastern coal would be displaced. Consequently, the use in Table E of a transportation cost figure of $4.272, upon which to reckon public savings is pure fiction because it does not represent what Stillwater receivers actually pay, and the resulting public savings are wholly imaginary.

Questionnaire No. 37 on Table E, signed by Mr. Neekamp, is identified as the return of the Yerly Coal Co., La Crosse, Wis. This concern indicates that it receives only 1,500 tons of eastern high volatile coal from the docks, but claims that it would take 100,000 tons via barge from the Big Sandy. Here again there is no intimation of why it receives no coal via barge from the Kanawha River or via rail to Huntington, thence barge, upon which transportation charges should be as low as or lower than from the Big Sandy. In addition to the dock coal received, Yerly Coal Co. obtains 33,000 tons of Southern Illinois coal, which presumably would be wholly displaced by the estimated river tonnage. In the estimated transportation savings, however, no consideration seems to have been given to the Illinois coal or whether eyen at the estimated Big Sandy River costs the consignee could save sufficient to warrant the shift in the source of the supply. The return is likewise silent as to how it will be possible to treble the present total high volatile coal requirements, which obviously would involve the taking of some other coal dealer's business, and no consideration has been given to what the other fellow might do to protect himself. In this instance, the transporation cost via the present shipping route is shown as $1.95% for which I know of no authority. It, however, is noted that Questionnaire No. 38 of Table E which is the return of the City of La Crosse, and does not bear the name of a field examiner, shows present shipping cost at $3.873 or $1.082 less than the amount assigned to the Yerly Coal Company's traffic. This, too, is uncheckable, but is clearly no more than somebody's guess, because the City of La Crosse now uses all Illinois coal on which the rates are considerably less than the transportation costs shown in Table E.

I have also examined a number of the returns covering coal consumers or dealers at other points on the upper Mississippi River, but because much of the foregoing applies equally to them, a detailed discussion would seem to serve no necessary purpose. In each case, the consignee now receives no, or only small tonnages of, eastern high volatile coal, but anticipates greatly increased receipts if the Big Sandy is canalized. These estimates contemplate displacement of Illinois and sometimes Western Kentucky coals, which move substantially less distances and at much lower rates than eastern high volatile coals-lower even than the Big Sandy cost estimates-but nowhere can I find that the existing transportation charges on such midwestern coals have been taken into account in the computation of so-called transportation savings. Likewise, the substantial increases in the estimated coal supplies of the reporting receivers would involve intrusions upon the markets of other coal dealers in these communities and no effort seems to have been made to demonstrate that this would be possible or probable.

One of the most ambitious and questionable of all of the returns is No. 43, which purports to be from the Black Fuels, Inc., Davenport, Ia., and is signed by field examiner Neekamp. This company, or perhaps it was Mr. Neekamp, claims that it now handles 300,000 tons of coal per year, of which 135,000 tons originates in the Pocahontas, Tennessee, and East Kentucky fields. The questionnaire shows that the movement is all via rail. If this statement is true, the Black Fuels must know of a way to ship traffic over railroads without even the railroads knowing anything about it. According to railroad records, as published by the Ohio Bureau of Coal Statistics, the entire movement of Eastern Crescent coal via all-rail routes to Davenport was only 11,000 tons in 1944, 11,417 tons in 1943, 13,618 tons in 1942, and in prior years about the same quantity. The estimated Big Sandy highvolatile tonnage in this return is 250,000 tons, and if, as may well be supposed, it is exaggerated as the statement of present consumption of eastern coals, it should be reduced just about to the vanishing point because Black Fuels are not the only dealers in Eastern coal at Davenport, where the total consumption is a mere 11,000 tons per year.

Another return which should be mentioned before leaving the Upper Mississippi River is No. 65, prepared by Mr. Neekamp for account of the Iowa Electric Light and Power Co., Iowa Electric Co., and Central States Electric Co., Cedar Rapids, Iowa. It indicates that the 5,000 tons of Eastern coal consumed by those companies will be diverted to the Big Sandy from all-rail routes for movement via barge to Davenport, Iowa, thence rail because Cedar Rapids is not on a navigable

waterway. Table E clearly shows that the all-rail movement now pays a freight rate of $4.85 and compares it with a Big Sandy River estimated transportation cost of $3.45. This is another mysterious computation because if we assume as correct for this purpose the Big Sandy River cost to Davenport of $2.42 as shown in questionnaire designated No. 43 on Table E and add to it the present rail rate from Davenport to Cedar Rapids of $1.68 Let ton, we get a total transportation cost figure of $4.10, which is 65 higher than the estimate in Table E.

Returns to questionnaires were made by or for account of five consumers in St. Louis, Mo., which are shown to have used a total of 1,051,200 tons of high volatile coal in 1940. The consumers' estimate of Big Sandy tonnage totals 975,000 tons and the U. S. E. D. estimate is 410,000. Two of the five reporting consumers consented to the request of the District Engineer for authority to permit railroads to inspect the returns. They are Nos. 62 and 64. No. 62 covers the Missouri Portland Cement Co., interviewed by field examiner C. C. Vaughan, who rejected the estimated 100,000 tons of Big Sandy coal, apparently because that company now uses Franklin County, Ill. coal, moving at a rail rate of $1.40 per ton. No. 64, however, upon which Mr. Neekamp's name appears, is indeed a gem. It relates to coal for the Supply Department of the City of St. Louis, and Table E shows that the U. S. E. D. estimated Big Sandy tonnage to the city to be 100,000 tons; that the present shipping cost is $4.00 per ton, and that via the Big Sandy River it will be $3.51 per ton. The answer to question 5 on the return states that the present sources of supply of the City of St. Louis are Belleville, Ill. District, 138,500 tons, Peru, Ill., 1,000 tons, and Arkansas smokeless, 1,700 tons, totaling 141,200 tons. The Belleville and Peru coal is routed some via truck and some via rail, and the delivered prices, which means the f. o. b. mine price of the coal plus the rail or truck rates, range from $2.57% to $3.00 per ton. On the Arkansas smokeless the range in delivered prices is from $6.27 to $7.39. Table E, however, says the present transportation charges alone are $4.00 per ton, which exceeds the highest delivered price of Illinois coal by $1.00 per ton, and then it states that the Big Sandy waterway will permit the coal to be shipped to St. Louis at a charge of $3.51, a saving of 49¢ per ton. In this case, the estimated Big Sandy transportation cost is actually 29¢ per ton higher than present all-rail rate from the Big Sandy field of $3.22.

The Board will be interested to note that the factual data on returns Nos. 62 and 64 are almost identical, but the conclusions are diametrically opposed. No. 62 (Missouri Portland Cement Co.), which was signed by Field Engineer, C. C. Vaughan, was construed as affording no probable basis for prospective Big Sandy traffic, whereas No. 64 (City of St. Louis), signed by Mr. Neekamp and also by Mr. Vaughan, is the authority for 100,000 tons of prospective Big Sandy coal traffic..

The record should show that according to a survey made and published by this Board in November 1941, there are no facilities in the city of St. Louis for the unloading of coal from barges.

Table E shows a total of 14 consumers at Chicago having been interviewed by field examiners, and the U. S. E. D. estimate of high volatile coal for their account totals 2,045,000 tons. Only seven of the fourteen reporting consumers permitted the District Engineer to give the railroads access, to the returns. They are J. A. Ross & Co., designated questionnaire No. 4; Chicago Waterway Fuel Co., No. 5; Hoskins Coal & Dock Co., No. 6; J. W. Peterson Coal Co., No. 7; Holland Coal Co., No. 8; Central Fuel Corp., No. 10, and South Chicago Coal & Dock Co., No. 12. The U. S. E. D. estimate of high volatile coal for these seven is 815,000 tons or about two-fifths of the total estimate for Chicago. The transportation costs "via present shipping routes" on these returns range from $2.60 to $3.19, the latter being the all-rail rate and the others apparently are estimated or computed costs for movement via rail to Lake Erie ports thence vessel. The railroad lake cargo coal rate f. o. b. vessels from the Big Sandy fields is $2.00 per ton, and the vessel rate to Chicago is not in excess of 50 or 55¢, so that the f. a. s. docks at Chicago total transportation charges should be not in excess of $2.50 or $2.55, which are lower than the figures used in all instances. Other high volatile eastern coal can be shipped to Chicago via rail-lake at total charges which are from 15 to 57¢ less than from the Big Sandy field. Inasmuch as all consumers or dealers in coal in Chicago capable of receiving barge coal may also take lake cargo coal, fairness should require that transportation savings be computed on basis of the lowest available transportation cost and had that been done, the computed savings would have been drastically cut or entirely wiped out.

From the seven returns made available to me, I have observed that the figures on Table E representing actual tonnages of high-volatile coal consumed in 1940 include not only eastern coals but also coals which originated in Illinois, Indiana, and Western Kentucky, and move to Chicago on rates a great deal lower than those applicable either all-rail or rail-and-lake from the East and even lower thau the estimated barge costs from the Big Sandy. The range in rates from the Midwestern fields to Chicago is from $1.20 (Northern Illinois) to $2.05 (Southern Illinois) and from Western Kentucky the current rate is $2.30. The lowest estimated barge cost from Big Sandy to Chicago is $2.28 and the highest $2.53. The computation of so-called transportation savings on basis of actual or estimated rates from the Big Sandy fields, therefore, overlooks the fact that the estimated transportation cost from Big Sandy exceeds the applicable rates on the Midwestern coals to be displaced.

The largest consumer of coal in Chicago listed in Table E is No. 3, which the statement shows consumed in 1940, 3,550,000 tons of high-volatile coal and 700,000 tons of low-volatile coal, of which it is estimated the Big Sandy would attract 640,000 tons of the high-volatile and 560,000 tons of the low-volatile coal. Transportation savings on this coal are computed by using the all-rail rates of $3.19 and $3.39. As this consumer did not permit us to inspect the return, I am unable to name the company, but I can state definitely that there is no industry or dealer in the Chicago District which in 1940 received as much as 4,250,000 tons or even as much as the U. S. E. D. estimate of 1,200,000 tons of Eastern high-, and lowvolatile coals via all-rail and none via rail-lake routes. Receivers of such tremendous quantities of eastern coal in the Chicago District invariably use the lakes for a substantial part of their requirements. It therefore follows that the estimate of savings based upon all-rail rates has no real foundation in fact.

Of even less substance is the return designated No. 10 on Table E, relating to coal traffic of the Central Fuel Corp., on the strength of which 250,000 tons of high-volatile coal were allocated to the Big Sandy waterway. Here, too, the allrail rate of $3.19 is used as the basis for computing so-called savings where as a matter of fact the Central Fuel Corp. receives most of its eastern coal via rail-lake routes, and a great deal of it originates in the Pittsburgh District, taking lake cargo coal rate of $1.65 f. o. b. vessel, which added to a vessel rate of 55¢ produces $2.20 f. a. s. docks at Chicago or 33¢ per ton less than the Big Sandy River estimated transportation cost shown on Table E as $2.53.

Because of my knowledge of the Central Fuel Corp's. business and my acquaintanceship with certain of its officers, I made a special effort through correspondence and personal contacts to develop the facts in connection with the figures on return No. 10 for the primary purpose of ascertaining whether or not it does, in fact, reflect that company's views and considered judgment as to the extent it would use the Big Sandy. In this manner I learned that the return was not prepared by any officer or employee of the company and that the company has no file records of any analysis of the possibility of utilizing the Big Sandy. Mr. H. A. Requa, president of the company, whose name appears on question 10 as the person contacted, recalls an interview with someone who represented himself to be a field examiner attached to the Army Engineer Corps, but because the conversation occurred so long ago and Mr. Requa placed so little importance on it, his recollection of the discussion is now rather vague. He does, however, remember having told the field examiner something of the nature and volume of his coal business and certain plans he was then considering but which never materialized, for increasing his coal business by the establishment in association with another firm of a vessel-fueling depot. The company's officers actually did not know until I showed them return No. 10 that they were on record as agreeing to furnish 250,000 tons of the traffic going to make up the economic justification of the Big Sandy project and as predicting that the tonnage might be increased by two or three hundred percent. In the answer to question 11 on return 10, it is stated that the Central Fuel Corp. would write a letter to the district engineer or the field examiner, presumably for the purpose of confirming and enlarging upon matters discussed during the interview. That company has no record or recollection of making such a promise, has not written, and has no intention of writing, such a communication. Nor did they otherwise reduce to writing anything that was said during the interview with the field examiner. In summarizing their advices to me on which these remarks are based, the Central Fuel Corp. said: "From the foregoing you may infer that we can see no immediate, direct benefit of canalization of the Big Sandy on our traffic to, from, or through Chicago."