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Reference is made to the case of Sun Maid Raisin Co. v. Blue Star Line, 2 U. S. N. C. 31. That case was a Stockton case, by the way. In that case the Commission held that when a ship called at Stockton and there lifted a cargo for Europe it must charge rates no higher than those charged at San Francisco, or any other port on the west coast.
This committee and the Congress of the United States insisted on parity of rates for various ports; consequently when a ship calls at a port and there lifts a cargo it must apply a nondiscriminatory rate, a rate no higher than at its nearest port of call.
If I may I would like to refer to the map on the board. The distance from Portland, Maine, through the Panama Canal and up to Tacoma, Wash., inland 121 miles on Puget Sound, is 7,429 nautical miles. The distance from Jacksonville, Fla., through the Panama Canal to San Diego, Calif., is 4,417 miles. The same rate of freight applies from all ports on the Atlantic coast through the canal to all ports on the Pacific coast.
A vessel will start at Boston, come down to Philadelphia, going up the Delaware River 88 miles, return, come back to New York City, and then sail for the west coast, calling at the various ports, including Stockton on the inland waterway of California, Portland, Oreg., on the inland waterway of Oregon, and then returning, come up the inland waterways of Washington, and the same rates apply.
Senator OVERTON. Is there any dispute about that fact?
Mr. STONE. Absolutely not. The tariffs, Mr. Chairman, are on file with the Interstate Commerce Commission.
Senator OVERTON. What bearing does it have on this project! Mr. STONE. That shows that ships will call, at inland ports and when they do parity of freight rates applies. It has been testified by the opposition that ships will not call, in the first place, and that, in the second place, when they do call they will not apply parity rates.
Senator ÖVERTON. They have to apply parity rates.
Mr. STONE. Certainly they do, but it was testified they would not. I merely wanted to indicate to the committee the facts and not make general statements without any supporting evidence.
You will find in my brochure or appendix supporting evidence for every statement I make.
Senator OVERTON. I know. There isn't any doubt about that.
Mr. STONE. The tributary area back of Sacramento is a highly productive one. That is admitted, I think, by everyone. I might call the attention of the committee to the fact we have a heavy producing agricultural area. Right north of Sacramento there is an annual production of 150,000 tons of cling peaches for canning. Due to lack of port facilities today, to reach the markets, the 150,000 tons are trucked to points beyond Sacramento to be near shipside. We want to ship from our point of production, so that tin plate for cans can come in and canned goods go out on a parity of rates.
As to in-bound commodities, Waverly, N. J., formerly shipped tremendous quantities of fertilizer cargo, when we had parity rates. That is no longer possible because in 1940 the rates were taken out. We formerly brought in a lot of tin plate by water. That, too, has stopped because we do not have the parity of rates from the Atlantic coast to our coast. The rates stop at San Francisco. When a ship gets to Stockton then the rate applies to Stockton, but there we have to haul from Stockton to Sacramento. That is greater than the water haul from San Francisco to Sacramento.
Now, may I point this out
Senator ÖVERTON. What would be the saving on rates if this proj. ect is built into Sacramento as compared with present Stockton rates?
Mr. STONE. Well, an average of $1.60 a ton of cargo, in-bound and out-bound, an average based on the origins and destinations in the territory, they average $1.60 a ton.
Senator OVERTON. Will that saving apply to both out-going and incoming ?
Mr. STONE. That is the average for both. I have taken a few illustrations, if you will refer
Senator OVERTON. There is some testimony to the effect that the out-bound cargo would not enjoy a lesser freight rate.
Mr. STONE. Oh, well, as to that, Mr. Chairman, we have on file with the Interstate Commerce Commission today, joint through rates by barge between the river and San Francisco and thence by the intercoastal carrier to certain Atlantic coast ports, the same rate of freight that applies from Stockton to other Pacific coast ports.
Senator OVERTON. So that there is no difference on the out-bound freight?
Mr. STONE. On a small portion of that traffic, there is not right at the moment, on the west-bound traffic we had that same arrangement from 1933 until after this Pacific Coast Act was passed in 1910. In 1940 the carriers elected to withdraw that parity of rates—that was prior to the passage of the 1940 Transportation Act-and the Commission permitted the carriers to cancel the joint through rates, which means we have a combination of rates over San Francisco on the inbound traffic. We have that cloud hanging over us so far as the outbound traffic is concerned, and the purpose of this channel is to provide a channel so that ships may call at Sacramento, there bring in our cargo and then lift our cargo, so that there may be no cloud over those rates and so that we may have absolute parity of rates.
When we have a channel where ships can call, then we will have that rate. That is the only way we can hold that parity of rates.
Now, if I may, Mr. Chairman, give you an illustration.
The other day there were four carloads of paper shipped from Chester, Pa., on the Delaware River by one steamship company to four of our Sacramento wholesale distributors. Three of those cars were shipped to Sacramento via San Francisco, Calif. The fourth car was shipped to Stockton and then on to Sacramento. The first three cars arrived off of that ship and reached Sacramento 7 days before the fourth car reached Sacramento. It cost the shipper who, incidentally, paid
the freight to Sacramento, it cost 121/2 cents from San Francisco to Stockton. The car that went to Stockton moved by Stockton Channel and through Stockton at the terminal rate and then it cost 14 cents, if you please, to move that car by truck, and the rail rate was the same from Stockton over the highway to Sacramento, so it took not only 7 days longer, but it also cost the shipper more in freight. So, when you are advised that Sacramento traffic can move economically via Stockton, it is not based on the true situation.
Now, as to the statement that the Sacramento Channel would be injurious to other ports, I have indicated that ships do serve a blanket of ports on the west coast, a wide range of ports.
If you will refer to appendix 11 you will find it is shown that the ports of San Francisco and Oakland have both developed very nicely since the port of Stockton was established. In 1935 the tonnage at Oakland was 3,097,370 tons. In 1940 it was 3,010,135 tons, and in 1941 3,111,184 tons. Stockton was developing along the same way, ranging from 587,630 tons in 1935 to 654,865 in 1940.
The port of San Francisco had increased from 6,627,799 tons in 1935 to 7,063,893 in 1941. The ports grew together.
San Franciso and Oakland at first opposed stockton, but they have found out that it didn't injure them as they thought it would. That is true on the Delaware River. There is Philadelphia, there is Camden, there is Trenton, there is Chester-all.with 15 or 20 miles of each other, and the reports show those ports have grown together, and on the Columbia River the same thing is true, and on Puget Sound it it true.
Now, as to salinity control: Salt water very seldom comes above Rio Vista in the Sacramento River in the low water periods today. Rio Vista is located at this point [indicating on map). This is the Sacramento River up to Rio Vista. The proposed channel will go to Rio Vista and then will leave the river just above Rio Vista, through a drainage channel about 9 feet in depth.
We have had no complaint of salt water above Rio Vista. The agricultural men pump water out of the river for irrigation. They pump water out of this drainage canal also for irrigation. The river at Rio Vista is about 20 to 25 feet in depth. The 30-foot channel will only deepen that channel about 10 feet. It must be obvious that there will be a very small amount of additional salt water that could possibly come up that small channel.
Now, as to the objection of the reclamation districts
Senator OVERTON. I don't thing you need worry about salinity. Let's get on something more important. If there is any danger of salinity the engineers will take care of it. If the Congress authorizes this project they are going to following the recommendations of the Chief of Engineers, which will authorize the construction of a lock to prevent saline inflow. So you need not worry about that. The engineers will take care of it.
Mr. STONE. If I may, I would like to submit this map as part of the record to show precisely where those complaining districts are actually located.
Senator OVERTON. It doesn't make a particle of difference. That is all going to be taken care of if the project is authorized, and if it is not authorized we don't have to bother about it anyway.
Mr. STONE. Thank you.
Now, the question was raised this morning, and the inference left with the committee that Stockton spent $5,500,000 for digging this waterway. As a matter of fact, the bulk of the expenditure was for terminal facilities and accessorial facilities.
As I recall it the initial project at Stockton was for a 26-foot channel. Stockton did, I believe, appropriate $1,300,000 or something in that range for initial dredging, but the bulk of the $5,500,000
spent by Stockton was for terminal facilities. I have indicated what we intended to do so far as our terminal facilities are concerned.
Senator OVERTON. I gathered from what they were saying that the contribution did not relate to terminal facilities.
Mr. STONE. That is right. That was the impression that I got from their statement.
Senator OVERTON. I thought the five million that Stockton spent was for dredging the channel, their portion of the dredging of the channel and had nothing to do with the terminal facilities. I got that impression.
Mr. STONE. I know. That is what I was trying to correct. That $5,500,000 which Stockton spent was not for dredging. They did spend, I believe, perhaps $1,300,000, or in that range, for dredging. The remainder of the five and one-half million was spent for terminal and accessorial facilities, warehouses, grain terminals, and what have you.
Senator OVERTON. All right.
Mr. STONE. Now, it has been stated that Stockton fears the development of Sacramento because it will divert traffic.from Stockton to Sacramento. I have shown that you cannot ship traffic that way economically in-bound. The same thing is true out-bound. There is no economic justification for shipping it that way. You can ship by Sacramento at a charge of $1.50 per ton. There being no saving, why should a shipper use the port of Stockton? Stockton is not handling the traffic today. They have got nothing to lose if we have our port because they are not handling the traffic today. I submit, therefore, they will not be injured if our project is approved and developed.
I think I have covered the situation, Mr. Chairman. We urge the approval of the Sacramento ship-channel project.
Senator OVERTON. We are very glad to have had your statement.
Colonel Feringa, we would like to hear from you on one matter. That is, there is a statement made here that a certain estimate was made by the engineers as to what the tonnage would be on the Stockton project and that the actual experience was disappointing.
Colonel FERINGA. Yes, sir.
Colonel FERINGA. Yes, sir. I sent out for the House document which describes the project. I have before me House Document No. 554, Sixty-eighth Congress, second session, that states on page 89 the total in-bound and out-bound tonnage expected for Stockton is 513,510 tons, and it states afterward:
It should be emphasized that these figures by no means represent the total movements and savings which would be effected by the ship channel. They are, however, the only figures for which some questionable support could be secured.
Again we were conservative.
Reading the front part of that document, we also state that the port authority should prepare and submit plans for an ultimate terminal development capable of handling at least 1,000,000 tons per year. We were then guessing in the future and asking them to prepare those plans.
That was for a 26-foot channel which was first authorized. Then we had a new study made, and I am reading now from Senate committee print, Seventy-third Congress, first session, reading from the report of the Chief of Engineers, who was then General Brown. He states that the district engineer is of the opinion that with a channel 30 feet deep, commerce of 1,000,000 tons per annum will eventually be built up.
The Board of Engineers for Rivers and Harbors is of the opinion that the potential value of the ship canal to Stockton will be materially increased by the proposed improvements. Based on reasonable prospective commerce and savings, these improvements are, in the opinion of the Board, economically justified. The Board, therefore, concurs with the division engineer and recommends that channel to be 30 feet.
I agreed with Mr. Atherton that the channel was 32 feet. There is a 30-foot channel plus a 2-foot overdepth. Now, the annual report shows for San Joaquin River, Calif., including Stockton, as followsI am reading from the Annual Report of the Chief of Engineers, starting in 1933—for a 26-foot channel, 966,080 tons; in 1934, 1,046,000 tons; and a high in 1940 of 1,048,658 tons, which was the ultimate tonnage that was expected. It went down in 1942—why, I haven't got time to ascertain this decline.
Senator OVERTON. Well, that is all right.
Colonel FERINGA. But as Senator Knowland said this morning, it was doubtless due to the war. I am glad to say we were fairly good in our estimate.
Senator OVERTON. You underestimated ?
Mr. MANGHUM. Mr. Chairman, I am an attorney representing Sacramento interests. With your kind indulgence, I would like to make a statement, or summary. I believe there are some points that I should cover.
Senator OVERTON. Are you with the proponents?
STATEMENT OF H. E. MANGHUM, REPRESENTING THE CITY AND
COUNTY OF SACRAMENTO, CALIF., AND THE SACRAMENTO CHAMBER OF COMMERCE
Mr. MANGHUM. My name is H. E. Manghum. I am an attorney representing the city and county of Sacramento, Calif., and also the chamber of commerce.
First let me say that Sacramento deeply regrets the reluctance of Stockton to view this project in the wholesome light of State and National welfare. The heart of its concern seems to be its fear that it will lose some traffic, and on that point I would like to call your attention to the view of Colonel Feringa as expressed at the hearings here.
The colonel stated that this project would not take tonnage away from Stockton and that there would be ample tonnage for both.
Now, of course, the colonel is utterly nonpartisan in this matter and therefore that opinion, to my mind, is entitled to very great weight. Of equal significance and probably of more telling effect is the view of one who by no stretch of the imagination can be considered in the slightest degree unfriendly to Stockton, and I refer to Congressman Leroy Johnson.