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companies have previously expressed plans to operate barges on this waterway when it is available.

I can assure you, gentlemen, that today there is nothing but complete harmony and enthusiastic support behind this project by the people of the Red River Valley.

We know that you gentlemen are extremely well qualified to judge and weigh the merits of this proposal, and we are confident that in the final analysis the people will have your committee's approval of the Red River lateral canal.

Senator OVERTON. We are going to vote on the reorganization bill at 5 o'clock. We will recess now until 10:30 o'clock tomorrow morning.

(Whereupon, at 5 p. m., an adjournment was taken until 10:30 a. m. Tuesday, June 11, 1946.)

RIVERS AND HARBORS

TUESDAY, JUNE 11, 1946

UNITED STATES SENATE,
COMMITTEE ON COMMERCE,
Washington, D. C.

The committee met at 10:30 a. m., pursuant to adjournment on Monday, June 10, 1946, in the Capitol, Senator John H. Overton, presiding.

Present: Senators Overton (presiding), Bilbo, O'Daniel, McClellan, Robertson, Cordon, Brooks, and Knowland.

Senator OVERTON. All right, the committee will please come to order.

Mr. Roberts, you said you wanted a few minutes in rebuttal on this Red River navigation project.

Mr. ROBERTS. Yes; Mr. Chairman.

Senator OVERTON. You may proceed.

STATEMENT OF HENRY N. ROBERTS, REPRESENTING THE ASSOCIATION OF AMERICAN RAILROADS Resumed

Mr. ROBERTS. There were a few statements made yesterday afternoon after I testified that I should like to make some mention of.

First I should like to refer to Colonel Feringa's statement with respect to transportation costs. As I understand his presentation, he was dealing with what he proposed was the actual cost of bargeline transportation.

Now, the figures he presented cover only the actual operation, only what is paid out by the barge operator. They do not include the cost of construction or annual maintenance paid by the Government. I take issue with him on that point because I am somewhat familiar with the document from which he read.

Now, the ICC report of 1914 from which Colonel Feringa read was on a natural waterway. The Red River Canal proposed is an artificial waterway. Furthermore, the figures are outdated as 1914 was quite a while before any large-scale barge developments took place on the inland waterways, particularly in the Southwest.

Senator OVERTON. May I interrupt you?

Mr. ROBERTS. Yes, sir.

Senator OVERTON. You said that this Red River Canal project is not a natural waterway. It does follow a natural stream, does it not? Mr. ROBERTS. It follows the Red River such as that may be. Senator OVERTON. There are three laterals of the Red River, the Bipierre and all these streams that were mentioned. There is no use of going over them again. Isn't it true that in the main all of

our natural streams, even the great Mississippi River, have to be improved for the purpose of navigation?

Mr. ROBERTS. Yes.

Senator OVERTON. We are deepening the Mississippi River now from Baton Rouge on up to the mouth of the Ohio from 9 to 12 feet. We are also constantly improving the navigation facilities at the mouth of the Mississippi River, and all the way down to Baton Rouge and New Orleans and on down. That is also true in reference to the Ohio; that is improved by reservoirs and from a navigation standpoint by locks and dams and so on.

It is true we have authorized a project to deepen the Missouri River · from its mouth 800 miles to the Sioux River. You don't take navigable streams just as they are. You have to improve them. That is true of this Red River Canal project. It follows certain natural streams which are improved.

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Mr. ROBERTS. There is another angle to that, too, Senator, that all of this potential waterway traffic, including the Red River Canal, is included on the basis of subsidy and it is on this basis of subsidy that all proponents or any shipper that would be approached on the subject would divulge his figures as to what he might be able to ship.

I, as a railroad representative, could go into that same territory and put out a questionnaire and ask how much tonnage they would be able to ship, or would ship if we offered them a subsidy, and we would get, I am sure, an answer along the same lines.

Senator OVERTON. Well, now, can you point out a single river and harbor improvement for navigation purposes where the actual tonnage fell measurably below that which was estimated by the Board of Engineers for Rivers and Harbors?

Mr. ROBERTS. No, sir; I don't have those figures, but I am quite sure there are streams in the Southwest that did not develop to the extent mentioned by them in this case.

Senator OVERTON. Can you mention any?

Mr. ROBERTS. No; I cannot. I haven't got the figures with me. I didn't bring my files with me.

Now, he said something yesterday about erroneous freight rates. As far as I was able to hear there was no rebuttal of my testimony. I wish, however, to point out two particular items which we did not cover, dealing with this particular phase of the report.

One is on grain and grain products. I believe the witnesses for the Louisiana interests testified that corn was not included.

Senator OVERTON. That is right.

Mr. ROBERTS. That may be correct because it is described as grain and grain products. The Board estimated a tonnage of 102,000 tons at an estimated saving annually of $207,800. Now, the faulty part of that deduction is this: There is no grain produced in Shreveport. There isn't any grain of any consequence produced at Shreveport, Alexandria, or Natchitoches or any other point in the valley. There may be some production of corn and sorghum grains, there may be some oats, but the record shows there is over 80 percent that is fed right back on the farms where it is produced.

Now as to your grain products for human consumption, that reaches back in western Texas, when we have a crop, and Oklahoma, Kansas, Iowa, and up through the Middle West territory. In order for these

people down there to get this tonnage which moves into Shreveport, most of it is elevated at Shreveport, it goes into the elevator and is processed into flour and other products, that material is subject to the through rate from the origin back from where it came from, to the final destination, which might be some point in the Southeast or some point in Louisiana. There is a very low milling-in-transit rate out-bound on it. It will average about 21⁄2 cents and that represents the difference between the rate from the point of origin of this grain and the ultimate destination of it.

When these boys rerated these waybills we were talking about yesterday, they didn't take that into consideration. They picked it up and put a rate on it as if it originated at Shreveport, and instead of using the transit rate of 21⁄2 cents sometimes it was in excess of 25 and 30 cents. By that same process

Senator OVERTON. I know very little about rates, but I understand they made a different statement.

Colonel Feringa, is that statement correct?

Colonel FERINGA. This question of rates is hard to settle.

Yesterday the railroads brought up two points; one, shipping gasoline by pipe line and the other, a pipe line from Helena, Ark.

Senator OVERTON. Well, what about this?

Colonel FERINGA. I would have to look it up in our worksheets. We went through that carefully with a fine-tooth comb, and we threw out many items which were not correct. I am inclined to believe when I look up this item, which I can have someone do, it will be found that consideration was given to that fact.

Mr. ROBERTS. Well, I challenge that statement. If it is proper I would like to have those rate experts testify before the committee. Senator OVERTON. Oh, we have got too much to do now.

Mr. ROBERTS. I thought so.

Senator OVERTON. May I interrupt you to read exactly what the Board of Engineers for Rivers and Harbors said they did with this controversy in connection with your statement as to the conclusions they reached?

Mr. ROBERTS. Yes, sir.

Senator OVERTON. It is very short. This is from a report of the Board of Engineers for Rivers and Harbors:

The analysis of the transportation savings obtainable from the proposed waterway consists essentially of a comparison of costs to shippers at 1945 rail rates on the estimated volume of traffic available under normal peacetime conditions, with the probable water carrier charges on the same traffic. The probable volume of tonnage has been determined from commodity movements disclosed by the 1939 waybill study to be physically and economically adapted to barge transportation via the proposed improvement, modified in accordance with recent supplementary field canvasses and with indicated changes in the pattern of railroad traffic in the area during the intervening years. The 1945 rail rates were supplied by the staff of the Interstate Commerce Commission. Because there are no barge operations now functioning on waterways closely comparable to the proposed improvement it was necessary to compute a system or rates that water carriers would find remunerative under the conditions to be provided. The process used for deriving these constructed rates rests on the actual cost of performance records of representative barge lines operating under conditions most closely conforming to those expected to prevail on the Red River project.

So I am pointing that out simply to show that they have gone very thoroughly into what the proponents had to say and the opponents had to say. They didn't take the views of either one. They con

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