the lookout for this-I had not understood that it was available, but due to the testimony of the railroads in opposition to some of the projects in this valley, this Red River Valley, also the TombigbeeTennessee project, I was anxious to find the comparative costs in rates, comparative costs of water versus pipe line and versus rail, and I have before me, which I would like to put in the record, a statement which has as its source the ICC Bureau of Transport Economics and Statistics, War-Built Pipe Lines and Postwar Transportation of Petroleum, Sam G. Spal; statement 44332, H-6-6, Washington D. C., August 1944, page 81.

Senator OVERTON. That is, the Interest Commerce Commission? Colonel FERINGA. Yes, sir; I understand this statement has not been espoused or accepted by the ICC, but I was interested in it because it gives figures much lower for waterway costs than we in the Corps of Engineers have previously accepted, because I feel we are conservative.

Before I read this I would like to make one other statement. I find myself as the representative of the Chief of Engineers and of the Board in the happy position of being accused by the proponents of being too conservative, with a word in front of it, and by the opponents as being too much on the other side.

In other words, the proponents without fail always say that our benefits are too low and why don't we consider this, that, and the other things. I hope you will hear the proponents so that they will bring that point out again in this case.

The opponents tell us our benefits are away too high. The reverse about costs. The proponents say our costs are too high, they should be lower; and the opponents frequently say our costs are too low, they should be higher. We steer a middle course. We try to be neither proponents nor opponents, but merely the consultants of Congress with no axes to grind, trying to give you the figures as best we know how.

Senator OVERTON. Personally, I am one of the critics of the Board of Engineers in that regard. I think they have been ultraconservative. I think the facts show it. On navigation projects they put down an estimated tonnage and in most cases the actual tonnage far exceeds that tonnage.

Colonel FERINGA. That is true.

Senator OVERTON. Still, it is a commendable conservatism because it creates confidence by the public and the Congress in the recommendations of the Board of Engineers.

Colonel FERINGA. They have been borne out by the chart in back of you which shows the tremendous growth of waterway traffic, traffic to which General Wheeler referred in his opening statement.

This statement of Mr. Spal says I am talking about operating expenses, including depreciation; there is another column for taxes and return on investment, but I am going to talk about the total-He says that for pipe lines, all companies combined, the cost per ton-mile-he does not differentiate between crude oil and gasoline for pipe lines—is 1.6 mills per ton-mile. That is for pipe lines.

For railways he gives for crude oil 7.5 to the nearest decimal and for gasoline 8.1 mills per ton-mile. He gives for tankers, which of course, is the cheapest, 0.5 mills for crude oil and 0.45 for gasoline, so we will say 0.5 mills. He gives for barges the type of transpor

tation that will make use of this Red River waterway-barge movement of crude oil and refined oils for 0.73 mills per ton-mile.

The only reason I am bringing this out now is because the statement was made that waterway costs were not low-I am not talking about rates or taxes-I am talking about the actual cost of moving commodities from one place to another-Mr. Spal states that waterwaybarge transportation cost is about one-tenth of the cost to move by rail. I would like to put this whole statement in the record. Senator OVERTON. That may be done.

(The matter referred to follows:)

TABLE 29.-Summary of petroleum transportation costs per ton-mile, by pipe line, railway, tanker, and barge

1 Mileages shown are average hauls for pipe line and railways, and selected hauls for tanker and barge transportation,

2 Pipe-line taxes include all State and Federal paid or accrued ruring the year.

are estimated at 50 percent of the operating income after depreciation.

Tanker and barge taxes

38 percent for crude oil pipe lines, tanker, and barge; 10 percent for refined oil pipe lines; 54 percent for class I railways.

Included with operating expenses.

$ Postwar.

Distance, in nautical miles, from Port Arthur, Tex., to New York City.

The equipment involved consists of one Diesel towboat of 2,000 horsepower with a postwar valuation of $300,000 and 10 9,000-barrel barges with a postwar valuation of $25,000 each. Distance from New Orleans, La., to Cincinnati, Ohio.

Source: ICC Bureau of Transport Economics and Statistics, War Built Pipe Lines and the Post-War Transportation of Petroleum; Sam G. Spal Statement No. 4432, file No. 86-C-6, Washington, D. C., August 1944, p. 81.

Senator CORDON. When you speak of costs, Colonel, you are talking about the cost of the barge in its operation, and so forth? Colonel FERINGA. That is right.

Senator CORDON. With no charge made on account of the fact that the Nation has gone in and made the highway?

Colonel FERINGA. That is right, sir.

Senator CORDON. When you take the cost of a pipe line and the cost of a railway and a tanker, do you include the capital investment? Colonel Feringa. Yes, sir.

Senator CORDON. In taking the railways and the pipe lines, you take into consideration the cost of preparing the transportation artery and that is included as part of the cost?

Colonel FERINGA. That is right. This is the actual cost. It includes depreciation as well as operating expenses. There is a further column which adds taxes and return on investment. That just leads into a new field, but I brought this statement to show a comparison of costs.

Now, again, talking from the ICC statement and more or less in answer to your question, Senator Cordon, I have here a decision which was made in 1914 when the ICC was considering whether tolls should be charged on the use of waterways.

This is in the case of Decatur Navigation Company v. Louisville & Nashville Railroad, decided in July 1914.

A natural waterway improved by the expenditure of public funds should be thrown open as far as possible to the free and unrestricted use of all those who desire to avail themselves of it. It differs materially from a privately constructed, privately owned roadbed, which though quasi public in nature is built by individual or corporate interests primarly for their own gain. A navigable river is a public highway, a natural avenue of commerce, and the public interest demands that its advantage be utilized to the fullest extent.

Senator HART. Colonel, I don't see your point in that because we are not talking about a river. We are talking about a waterway, that is, a canal, that is constructed. I don't quite follow on that. I have got to go now, if you will permit one question.

It happens there is a Government corporation engaged in the transport of freight by water, the Inland Waterways Corporation, that is what it is known as.

Colonel FERINGA. That is right.

Senator HART. It works on the Mississippi, the Ohio, and somewhat on the Warrior River. Do you ever use the costs it has turned in-their public records-they are handled by the Comptroller, and so on, the same as the other corporations do you ever use their costs?

Colonel FERINGA. We certainly do, Senator Hart. We are glad to get their unit costs.

Senator HART. They don't make out your case very well.

Colonel FERINGA. I think they do, Senator Hart; yes, sir.

Senator HART. They are running at a loss to the Government all the time.

Colonel FERINGA. I was not aware of that.

Senator HART. I suggest you get out their reports and put them in the record.

Colonel FERINGA. Yes, sir.

(The latest published annual report of the Inland Waterways Corporation follows:)

Hon. HENRY A. WALLACE,

Secretary of Commerce,

ST. LOUIS, Mo., May 14, 1945.

Governor, Inland Waterways Corporation.

SIR: Pursuant to section 2 (p) of article 1 of the bylaws of the Corporation, the annual report for the calendar year 1944 is submitted herewith.

Upon the resignation of Mr. Chester C. Thompson, as Chairman of the Advisory Board and president of the Corporation, effective August 15, 1944, I was designated Acting Chairman of the Advisory Board and acting president of the Corporation, in which capacity I have served since August 16, 1944. On August 8, 1944, Mr. Thompson also resigned as president of the Warrior River Terminal Co., the Corporation's rail subsidiary, and on that same date I was elected by the Board of Directors to succeed him as president.

In accordance with existing regulations, the secretary-treasurer of the Corporation has submitted to me a financial report for the year with appropriate exhibits. His report is attached hereto, and it is recommended that it be included in the Corporation's published report for the year 1944.

The consolidated operating deficit of the Corporation and its subsidiary, the Warrior River Terminal Co., for the year 1944, amounted to $385,545.49 as compared with a consolidated net income of $178,012.08 for 1943, a shrinkage of $563,557.57, resulting from the following:

It is appropriate at this point to report that the savings to the public in 1944 amounted to $1,733,300 and for the period June 1, 1924, to December 31, 1944, aggregated $42,765,000. This represents the difference between charges paid on traffic routed via the Corporation and the charges that would have been paid had the traffic moved all-rail.

The total revenue freight transported in the Corporation's own barges amounted to 2,084,156 tons in 1944, compared with 1,932,662 tons in 1943. The tonnages transported on the lower Mississippi, upper Mississippi, and Illinois Rivers increased in 1944, while on the Missouri and Warrior Rivers the volume decreased. The following table displays these differences between the two years:

(Single-count tonnage is after elimination of tonnage exchanged between districts of the Mississippi System, and between the Mississippi System and the Warrior Division. See exhibit No. 15.)

In addition to the afore-mentioned tonnages transported in the Corporation's own barges, there were also handled on a towage basis for accounts of others, including carriers, the following:

(Single-count tonnage is after elimination of tonnage exchanged between districts of the Mississippi System, and between the Mississippi System and the Warrior Division. See exhibit No. 15A for details.)

Again, as in several recent years, the direction of movement of traffic was badly out of balance. Increased volume of bulk freight resulted in greater percentage of upstream traffic in 1944 This affected the financial operating result adversely by increasing operating costs 8.7 percent, 1944 over 1943. This increase resulted substantially from the operation of more towboats in 1944 than were operated in the preceding year. The service time of towboats operated in 1944 amounted to 8,530 towboat-days, compared with 7,799 for 1943, an increase equivalent to 2 additional towboats in operation for the entire year.

The preponderance of north-bound traffic, as compared with south-bound traffic transported by the Corporation in its own barges as well as in barges of others, may be seen from the following comparisons:

Transportation of merchandise and bulk freight in the Corporation's own equipment, expressed in percentages, is shown in the following table:

Bulk freight transported in the Corporation's own barges during this period consisted principally of essential war supplies, as shown in the following classification:

In addition to freight transported in the Corporation's own barges, a further contribution in support of the war effort was made by towing war supplies for others, including other carriers. The table shown below indicates the extent of this service:

Particular attention is directed to the movement of liquid cargoes, which require special equipment, thus necessitating the return handling of empty barges downstream.

The

Towage of outside equipment, particularly combat craft, was performed in considerable volume in 1944. The total tonnage of this type of movement in 1944 amounted to 270,273 tons, as compared with 153,898 tons in 1943. value of the great inland waterway system of this country has probably never been better demonstrated than in the performance of this service during the national emergency. Innumerable seagoing vessels were constructed at inland shipyards. Although this Corporation handled only a fraction of the craft so constructed, its contribution in this respect, since the beginning of the war, when reduced to the number of units, represents the delivery of a formidable navy to deep water. It is indicative of the important role played, not only by this Corporation but by other inland water carriers, in the furtherance of the war effort.