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being a State highway he objects to the imposition of that burden on the State of Indiana.

The proposed dock terminal at Clark Street is estimated at $1,000,000. You have heard this morning the testimony that the Nashville railbarge-truck terminal costs $400,000 12 years ago. It is inconceivable that the same thing would be done for Gary which would have a larger industrial shipment, if any, for less than $1,000,000.

Those costs must be borne by the local interests. The people whom I represent pay approximately 43 percent of the taxes of the city of Gary. We do not like the thought of being saddled with this added imposition there by way of taxes or whatever it may be. We have enough difficulty now, as my friend, Mr. Finnerty, and I have discussed, and we don't believe this project is at all justified under the present existing facts.

Now, the position of the E. J. & E., that is the railroad, is different. The railroad has a bridge which crossed the river within the 2-mile stretch, at this point. It has a railway bridge on the line which is its most heavily traveled line, taking traffic from this area in Gary over here to the area in East Chicago and Whiting, over here and down across the river and finally meeting this main route, which goes from Joliet to the East. The peculiar conditions incident to the rebuilding of that bridge would make it extremely expensive.

The South Shore Railway overpasses a few feet south of the bridge and to satisfy the minimum limits required by the United States engineers would require some adjustment of that overpass which is almost immediate in its contiguity. A lift bridge would require 24-hour-a-day service. The cost under the Truman-Hobbs bill of a lift bridge to the railroad ranges from $111,000 to $148,000. The cost of the bridge tenders, basing it on the same items of cost as have been established by the Government on the Indiana Harbor Canal, is $15,000 a year.

Now, examine a fixed bridge and the cost is much greater. The Government figures—their own figures—shown $2,181,000, of which the railroad would have to pay more than 15 percent established under the Truman-Hobbs bill. That is over $400,000.

The railroad's position is that regardless of conditions, whether local interests be this or that, even though the Government were to assume the cost of the bridge and the barge-rail-truck terminal, the railroad is definitely opposed to the construction of this 2-mile stretch into the city of Gary because of its utter lack of justification, as it is 3 miles away from any point in Gary requiring a rail haul to reach this proposed new terminal.

Senator OVERTON. You say a rail haul. Is there a truck haul?

Mr. STEVENSON. Oh, yes, sir. Truck haul costs are higher than rail haul costs.

Senator OVERTON. Well, there is a truck haul available?
Mr. STEVENSON. Oh, yes; there is a truck haul available.

Senator OVERTON. Would that reduce the cost of hauling by truck if the channel is extended 2 miles nearer

Mr. STEVENSON. Do you mean would not the use of trucks bring the local transportation cost down?

Senator OVERTON. No; reduce the cost of truckage if the channel Mr. STEVENSON. I don't think it would have any effect on it, and there was tremendous influence brought to bear to immediately stop it.

were nearer.

Senator OVERTON. Do you think it is charging as much on the haul for 3 miles as it would be for a haul of 5 miles ?

Mr. STEVENSON. Certainly. It is within a very limited area. There is a slight differential in truck haul cost between East Chicago and South Chicago, but it is only a slight distance in the matter of difference. In other words, there is the necessary rail haul to reach this point [indicating on map] as it would be to reach this new proposed dock which, to put it short, into the cornfield.

I should like to call on Colonel Feringa for the information, but if I am not allowed to propound a question to him I would like to have it propounded by a member of the committee, whether it is not his opinion that the elimination of this 2-mile stretch I am talking about would affect or make unsound the remainder of the proposed project.

Senator OVERTON. I think Colonel Feringa has covered that point. At any rate, it could be built at a point nearer to the West.

Mr. STEVENSON. If that is the belief of the committee, then I request and say

to
you

that we want those 2 miles eliminated even under the conditions imposed by the War Department.

Mr. Chairman, I would like to file such additional copies of this paper as may be necessary, both of this statement and of the statement on behalf of the railroad company.

Senator OVERTON. It may be filed.
Mr. STEVENSON. I will hand a copy to the committee reporter.

Senator OVERTON. Did you want this printed also as a part of the record ?

Mr. STEVENSON. I am not so much concerned about the statements being printed as that the members of the committee will read them. Senator OVERTON. I think we can read them just as well if you

file them. So they will simply be filed with the committee.

Mr. STEVENSON. All right. I thank you.

Senator OVERTON. I believe that finishes the opposition. We will now hear the proponents, those in favor of the project.

STATEMENT OF J. E. FINNERTY, MAYOR, GARY, IND.

Mr. FINNERTY. Mr. Chairman, I do not have a prepared brief to file with the committee. I filed one at the time of the hearings in Gary.

I would like to dwell momentarily on the statement made by Mr. Stevenson. We are not too far in disagreement other than on several factors involved. I would like to go to the map and discuss it briefly with you, if I may.

Senator OVERTON. You may do so. Mr. FINNERTY. We are wholly in agreement with the position Mr. Stevenson takes that if conditions warrant it at the time of construction, I mean that it is not economically sound, then we as public officials in Gary do not propose to proceed.

It is our position, however, that these are the facts involved: The ground is purchased for the extension. We of Gary pay a third of the taxes in the area, I mean the citizens of Gary including the corporation that Mr. Stevenson represents. We will pay a third of the cost of all bridges built. The county commissioners of our county have agreed to build them. I was ‘county auditor at the time when this project came up. We agree to buy and get no benefit whatever.

As to the project, the East Chicago Chamber of Commerce proposes that it be moved to Pine Avenue. There are 300,000 people living in this area, and there are 130,000 in our own city.

This industrial area here that I point to on the map is entirely built up by industry. There is very little, if any, available land. Land is selling at a high figure, and certainly in regard to the question of the width of the project, land acquisition is important to be considered and it should be purchased now if it is to be built.

This territory in here that I point to on the map, running from the junction of United States ship canal to Pine Avenue, and which Mr. Stevenson did not speak of, is taken up by industry. At the present time the United States Government owns around 610 acres, right in here, which the city of Gary is attempting to negotiate for, but we cannot pay the price asked for it. If it is not purchased for airport purposes and we have collected a fund of $250,000 in the city as an industrial foundation to bring industry into the community—then it should be used for industry.

There are plants here, at this point I show you on the map, and they will use very little of this territory.

If the city does not purchase this land I am now pointing to for an airport-and if we do purchase it for that purpose I will be the first to go in and say cut it off, but it does not look like we will be able to purchase it because we cannot agree on it. I mean the price for it. The War Assets Corporation holds it as industrial land. We feel that we want industry to come in there, and we are willing to put through such a barge terminal.

Senator OVERTON. How far away is the nearest airport at this time?

Mr. FINNERTY. This entire industrial area that I am pointing to on the map has no airport at the present time.

Senator OVERTON. But my question is, how far away is the nearest airport?

Mr. FINNERTY. The Chicago Municipal Airport is 25 miles or more away, perhaps 30 miles away. But the proposition is this: That at the present time anybody in a corporation here at Chicago, or the steel corporation, if they want to load by barge they put it in a boat and go around by the Calumet River by means of a lake vessel. And, of course, here it would mean this for the citizens of Gary: We would pay a third of the local cost of bridges and then have to move everything over to East Chicago when we had the business. And that when we have the opportunity at small cost in this particular project of bridge involvement, and we are ready to purchase this land, and if we do not purchase it for airport purposes; I mean this land which the United States Government has bought and now has for sale as surplus property, purchase it I mean for industrial development.

Senator OVERTON. But Mr. Stevenson says the construction of these additional 2 miles will not reduce the cost.

Mr. STEVENSON. You will have to have the rail haul to get to it.

Mr. FINNERTY. We do for your industry but not for others. We have around 2,000 acres altogether of zoned land for industrial purposes. And there are 610 acres right here, at the point I show you on the map, for sale and we could not get into the market for that purpose.

The history of this whole territory, I mean its development, is because of the great development of rail and water transportation. This area in here, in East Chicago, does not have hardly a solitary foot available for industrial expansion. They are coming to our city because they have purchased all of the land along the canal.

Senator OVERTON. I take it what you mean is this: That the extension of that waterway, to the eastern end of that project, would be very useful for future industrial development ?

Mr. FINNERTY. Yes, sir. There is nothing left other than that.

Senator OVERTON. And future industrial development will have an all-water haul.

Mr. FINNERTY. That is right.

Senator OVERTON. Have you anything else to present to the committee?

Mr. FINNERTY. That is all that I have to offer.
Senator OVERTON. We thank you very much.
Mr. FINNERTY. And I thank you for this opportunity.
(Thereupon Mr. Finnerty withdrew from the committee table.)
Senator OVERTON. Who will be the next witness?

STATEMENT OF H. W. JOHNSON, STAFF ASSISTANT TO THE PRESÍ.

DENT, INLAND STEEL CO., EAST CHICAGO, IND. Mr. Johnson. Mr. Chairman, my name is H. W. Johnson. I represent the Inland Steel Co., which is an independent producer of steel, and we are located at the point I show you on the map, on the shore of Lake Michigan, right at the foot of the Indiana Harbor ship canal.

Our iron ore comes down from the upper lakes by ore boats into our plant, and during the summer months our coal comes to us in boats which were loaded on Lake Erie at Toledo, and the coal had been sent up from eastern Kentucky and West Virginia.

We are interested in the development of the Calumet-Sag Channel, for by this means we will get an inside connection from our plant at Indiana Harbor to the Mississippi River. With such an inside connection we would then be competitive with the steel plants on the Ohio River. The Ohio has been improved so that the steel plants which have access to it are able to transport coal economically to their plants, and also to transport products they manufacture down the river into the South and the Southwest. I mean by using river barges.

There are three ways in which this development will aid us:

1. It will provide barge movement of coal from West Virginia and eastern Kentucky; and that, incidentally, is from the region of the Big Sandy River which was discussed here yesterday.

2. It will provide better facilities for barge movement of Illinois coal and fluorspar to Indiana Harbor.

3. It will provide for shipment of steel down the waterway into the South and the Southwest, and also for reloading at New Orleans for the Pacific coast.

There are two classes of coal used at our plant, one grade for producing coke and the second grade for generating steam. The coking coals come from the high-volatile fields of eastern Kentucky, and the low-volatile from the West Virginia Pocahontas fields, including the Big Sandy Basin. During the past 4 years we have consumed between two and three and one-quarter million tons of such coking coal per year at our plant, the most of which could be moved by barge if we had this improvement.

Senator KNOWLAND. I suggest that you tell us where your plant is located by pointing on the map.

Mr. Johnson. This is the area, in here, including this portion here. Senator OVERTON. If the last 2 miles were cut off you would not be adversely affected, would you?

Mr. Johnson. That would not bother us. Our barge movement would be this way and up here to our plant. [Indicating on map.]

Senator OVERTON. All right. You may proceed.

Mr. Johnson. During the summer coal is shipped by rail to Toledo, and that is from the Big Sandy River region, and then it is loaded into ore boats for shipment to Indiana Harbor over the Great Lakes.

During the 5-month winter season the coal is shipped all rail. The combined water and freight rate is $2.55 and the all-rail rate is $3.19. This freight rate is more than the cost of producing the coal at the mine, and consequently any reduction in the cost of transporting a ton of coal to Indiana Harbor is of major importance.

We can visualize a program whereby the empty coal barges at our plant would be loaded with iron ore to be transported to steel plants along the Ohio River, down for instance at Hamilton, Ohio, and Ashland, Ky. By having the barges move loaded in both directions, material savings will be effected. We have the space necessary to construct such transfer facilities.

The improved waterway will facilitate the barge movement of Illinois coal and fluorspar to our plant. These tonnages are not of major importance but are significant. We not only believe that they will be increased but that other sources of material we do or might use may be developed and so add still further to the tonnage.

The inside channel would be of major importance to us in allowing for water transportation of our finished product. Previous to the development of the Ohio River we were able to compete successfully in the South and Southwest. With the development of the Ohio River those plants which were located adjacent to it were greatly benefited, and as a result we are less able to compete successfully in that area.

We are a small company and have only one plant that produces steel. If we are to reach any market it must be from this one source at Indiana Harbor. Other large companies are not up against the same problem we are. They may have plants in several localities, such as Pittsburgh and Chicago. The fact that they have a substantial tonnage of sheets to move to New Orleans is of no interest to the Chicago plant. They can schedule the production of those sheets at Pittsburgh and take advantage of the lower cost of water rates down the Ohio. Consequently the development of this waterway is of little interest to them.

We believe it will be an asset to have this final link in the waterway system completed. If we are able to compete successfully in the South, the Southwest, and on the Pacific coast, with the large producers in the Pittsburgh area, it will benefit the people not only in the cost of steel delivered but in the service that will be rendered.

I thank you.
Senator OVERTON. And the committee thanks you.
(Thereupon Mr. Johnson withdrew from the committee table.)
Senator OVERTON. Who wishes to be heard now?

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