The production of coal by mines along and adjacent to the Kanawha River becomes a good measuring stick to determine how feasible the movement of coal by river really is and what tonnage is likely to move through the proposed canal over a period of years. The following table shows the net tons moved in barges from the Kanawha River to the Ohio River for the past 10 years as compiled by the United States engineer's office at Huntington, W. Va.:

The coal which moves from these mines along and adjacent to the Kanawha River is of the same general kind and quality of high-volatile coal and competes in the same general markets as coal which would be produced along the proposed canal. Transportation conditions on the proposed canal would be similar to and no more favorable than those on the Kanawha River and barge-transportation costs for handling the coal on the two waterways would be approximately the same. However, the largest movement of coal from along the Kanawha River in any one year was in 1942 when 3,110,000 tons were shipped. The average shipments for the 5-year period, 1940 to 1944, inclusive, was 2,608,000 tons. Coal from along the Kanawha River has never moved, in quantity, down the Ohio River beyond Cincinnati, Ohio. Coal reserves are available along the Kanawha River to greatly increase this past production, but the producers have been unable to market greater amounts.

Therefore, it is reasonable to assume that the movement from the proposed canal will be no greater, if as great, as past movements from along the Kanawha River. Using these shipments as a basis, and assuming that the same amount of coal would move through the proposed canal as was shipped during the peak year of 1942, from mines along the Kanawha River, i. e., 3,110,000 tons, the transportation costs, including estimated barge-transportation charges of 33 cents per ton, would be $1.8461 per ton, or $1.2261 per ton greater than the cost of shipment by rail and dumping into barges at the mouth of the Big Sandy River, with the total annual costs being $3,813,171 greater. Assuming that the annual shipments equalled the average of the total shipments from along the Kanawha River during the 5-year period, 1940-44, inclusive, i. e., 2,608,000 tons, the total transportation costs would be $2.1379 per ton, or $1.5179 per ton greater than if shipped by rail and dumped into barges at the mouth of the Big Sandy River, with the total annual costs being $3,958,683 greater. This expenditure would be borne by the Federal Government and would benefit only a relatively few persons.

However, there is no sound basis for an assumption that a market for coal from along the proposed canal would be found which is not presently being amply supplied by coal moving from mines along the Kanawha River.

III. THE DIVERSION OF TRAFFIC TO SUBSIDIZED WATERWAYS TENDS ULTIMATELY TO INCREASE FREIGHT RATES ON ALL TRAFFIC

The railroad rates are subject to review and change, through orderly processes of the Interstate Commerce Commission, to the extent. that such change may be warranted by circumstances that purport to accord equal consideration to all users of rail transportation. However, such considerations affecting the general level of rail rates must also give due weight to adequate earnings of all of the railroads involved.

The efficient operation of the railroads has been, and is, recognized as essential to our national transportation needs. When the railroads do not receive revenues sufficient for such efficient operation they must, and do, seek additional revenues in the form of increased rates on the traffic they handle. Thus the diversion of traffic to other modes of transportation increase the burden upon the remaining rail traffic. Under favorable natural conditions such diversion of traffic to other modes of transportation may logically be expected, regardless of the effect upon rail rates applicable to the remaining rail traffic. But to accomplish such diversion by the means of Federal subsidies and thereby place additional burden upon the remaining rail traffic is not warranted.

Therefore, it is requested that this honorable committee earnestly consider the foregoing and report against the appropriation of money for this project.

Mr. LAWSON. I now want to call on Mr. T. J. Hoffman, representing the Kentucky Coal Agency, Madisonville, Ky.

STATEMENT OF T. J. HOFFMAN, KENTUCKY COAL AGENCY, INC., MADISONVILLE, KY.

Mr. HOFFMAN. Mr. Chairman and members of the committee, my name is T. J. Hoffman. I am a member of the board of directors of the Central Coal Agency and vice president of the Western Kentucky Coal Co., Paducah, Ky.

We are very much opposed to this canalization on the Big Sandy and its tributaries, because we feel that it is unnecessary and is a waste of public funds. We are in the river transportation business, and I might add that one of the major features is unloading these barges after they are transported to destination. We have found that one

of our big difficulties has been interesting customers who were able to unload these barges in sufficient time to enable us to transport the coal economically. I will just file my statement. (The statement referred to follows:)

KENTUCKY COAL AGENCY, INC., Madisonville, Ky., May 3, 1946. Re Big Sandy River and Tug and Levisa Forks, Ky., and Va., proposed canalization of.

COMMITTEE ON RIVERS AND HARBORS,

House of Representatives, Washington, D. C.

HONORABLE SIRS: The Kentucky Coal Agency is a voluntary group of bituminous coal operators in the western Kentucky coal field, functioning as a nonprofit corporation, for the purpose of promoting the interests of its members and protecting their markets for the distribution and use of western Kentucky coal. The agency membership represents approximately 80 percent of the coal produced in western Kentucky.

The western Kentucky field includes coal-bearing areas in at least 17 counties. The preponderance of the tonnage is produced in Butler, Christian, Daviess, Henderson, Hopkins, McLean, Muhlenburg, and Webster Counties. Over 85 percent of the present output comes from Union, Hopkins, Muhlenburg, and Webster Counties. The principal seams mined are known as Nos. 6, 9, 11, 12, and 14. The Baker, Green River, and Nebo seams have been tentatively correlated with the No. 14 bed. There are about 20 seams of coal in the western Kentucky field, many of which have not been correlated, and of these the most important is the Empire or Mannington bed.

These coals are sold to railroad companies, industrial plants, retail dealers, and the domestic trade, and they are also well adapted for buakering, dredging, and other activities on the inland waterways.

Western Kentucky mines are served by the Illinois Central and Louisville & Nashville Railroads, and they have outlets to the Ohio and Green Rivers.

This mining area covers approximately 6,000 square miles and about 8,000 miners are employed, which if multiplied by 5 which is considered a conservative figure by the census, we would have 40,000 people depending on their livelihood by being actively employed in these mines. Of course, there is a substantial number of people directly and indirectly connected with these mines, who would be adversely affected if any dislocation or change was made that would alter the general plan that has been in existence for many years.

At the present time, this area produces approximately 20,000,000 tons of coal annually. The production with access to the Ohio and Green Rivers has been brought about by their own initiative and private capital. One of our members, the West Kentucky Coal Co., operates a coal tipple on the Ohio River at Caseyville, Ky. This tipple has a capacity of 800 tons per hour. The coal is transported to the river over the company's railroad in their own cars and by their own engines. The company has recoverable coal available in Union County for this tipple estimated at 50,000,000 tons, and in Webster County, which coal has at times been transported to the river, 33,000,000 tons. At the present time, and since 1905, this member company has been dumping coal on the Ohio River at Caseyville, Ky., and there is available, at this time, a substantial quantity of this coal for loading in barges for waterway movement to points on the Ohio, Tennessee, and upper and lower Mississippi Rivers. There is also a substantial tonnage of coal available for loading in barges on the Green River. Unquestionably, if a high grade of coal, which is produced in eastern Kentucky, is made available by the spending of public funds on this project, it will be the source of much discontent and poverty in other coal-mining areas, such as western Kentucky, Indiana, and Illinois, with accompanying unemployment, dislocation of labor, and ruination of private mining enterprises in these areas.

We feel the United States Government should not be a party to subsidising one area to the profit of the immediate population, but which in turn would serve no other purpose than causing misery, unhappiness, and poverty to the other coalproducing localities.

Coal operators in western Kentucky consider the proposed canalization of the Big Sandy and its tributaries as a direct threat and a serious menace to their continued production and distribution of these coals, and to millions of dollars invested, and they vigorously and vehemently object and oppose the spending of public funds to improve or canalize the Big Sandy River and its tributaries.

With the production of bituminous coal running at 620,000,000 tons for 1944 and approximately 570,000,000 tons for 1945, and an estimated 550,000,000 tons for 1946, there is no logical reason or excuse to open up additional coal mines or coal-producing fields at this time, as undoubtedly it is going to be a serious problem to keep the present mines active and the present miners employed. Respectfully submitted.

KENTUCKY COAL AGENCY, INC.,
T. J. HOFFMAN,

Member of the Board of Directors.

Kentucky Coal Agency, Inc., traffic department, weekly loading report, Apr. 8 to 13, 1946, inclusive

Mr. LAWSON. Thank you very much, Mr. Hoffman.

I desire to call the attention of the committee to the fact that all coal organizations or associations in the State of Kentucky have appeared here in opposition to this project.

At this time I desire to present Mr. Harold V. Scott, of Indiana, traffic manager of the Coal Trade Association.

STATEMENT OF HAROLD V. SCOTT, TRAFFIC MANAGER, COAL TRADE ASSOCIATION OF INDIANA, TERRE HAUTE, IND.

Mr. SCOTT. Mr. Chairman and gentlemen of the committee, I would like to submit for the record a prepared statement on behalf of the Indiana coal operators, to show that the proposed project would be harmful economically to the State of Indiana, and second, to show that it will be a waste, in our opinion, of public funds, to which the people of Indiana contribute through taxes.

Mr. PETERSON of Georgia. Without objection the statement will be made a part of the record.

(The statement referred to follows:)

STATEMENT OF HAROLD V. SCOTT, TRAFFIC MANAGER, COAL TRADE ASSOCIATION OF INDIANA, AT HEARING BEFORE THE HOUSE COMMITTEE ON RIVERS AND HARBORS ON MAY 6-7, 1946, WITH REGARD TO THE PROPOSED CANALIZATION OF BIG SANDY RIVER AND TUG AND LEVISA FORKS, KY., W. VA., AND Va.

My name is Harold V. Scott and I am traffic manager of the Coal Trade Association of Indiana. My business address is 632 Cherry Street, Terre Haute, Ind. This association is a voluntary organization, composed of firms, corporations, and individuals who own and operate bituminous coal mines in the State of Indiana. The members of the association mine and ship in excess of 90 percent of the bituminous coal produced at rail mines in Indiana. My duties are to represent these Indiana coal operators in all matters pertaining to transportation.

I appear here on behalf of the Indiana coal operators who would be adversely affected and irreparably injured if this proposed canalization of the Big Sandy River and its Tug and Levisa Forks is constructed. The Indiana coal operators are opposed to the project because of the economic harm that would result to the State of Indiana, which would be brought about because the estimated large tonnage which will originate on or adjacent to the proposed waterway will move principally to Midwestern States, which are today the markets for the coal produced and shipped by the Indiana coal operators.

The Indiana coal operators sell their coals principally in the States of Indiana, Illinois, Wisconsin, Iowa, and Minnesota, and to these markets is shipped more than 90 percent of the coal produced in Indiana. The majority of the prospective customers named in the engineers' report are located in these same States. In the year 1945 there were 61 bituminous coal mines operating in the State of Indiana, which produced in excess of 25,000,000 tons of coal. These mines are located on railroads and ship their coal via railroads. The Indiana coal-mining industry employed approximately 12,000 persons in the year 1945, and all of these employees were necessary to mine the 25,000,000 tons produced.

Many of the prospective customers named in the engineers' report secure all of their bituminous-coal requirements or a part of such requirements from these Indiana mines. The war is now over and it can be said that all business will shortly return to normal, and this includes a normal coal market. The Indiana coal which would be displaced by coal moving via the waterway from mines adjacent to the Big Sandy and its tributaries would result in a lowered production of coal in Indiana, and such decline in production would necessarily result in the employment of fewer men in the Indiana mines.

It is clear that Indiana is capable of producing at all times in excess of 25,000,000 tons of coal annually and emloying 12,000 or more persons to produce this coal. When the market for Indiana coal declines, production declines, and this resiilts in a reduction in the number of persons employed in the coal mines. In normal times Indiana has produced considerably less than 25,000,000 tons of coal and employed fewer persons. As indicative of this, the figures show that in the year

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