led 35 million tons per annum of a total of over 55 million tons. The volume of petroleum commerce in 1958 exceeds the estimated petroleum erce (34 millions tons) considered by the district engineer in the interim of reports dated March 22, 1957 (H. Doc. 350, 85th Cong.) to be prove to the waterway during the life of the project. The growth of comin these waterways has increased beyond all expectations and there is reason to believe that the growth will increase in the future.

authorized improvement project provides for dredging Galveston Harbor hannel (entrance channel) to 42 feet by 800 feet from gulf to a point s west of the seaward end of the north jetty, thence 40 feet by 800 feet sing to 40 feet by 400 feet at the junction with Houston ship channel. ing Houston ship channel to a depth of 40 feet from Bolivar Roads to wer end of Brady Island and in Hunting Bayou turning basin with an se in width to 400 feet from a point 5,000 feet above Baytown to Boggy ; rectifying the alinement between Carpenters Bayou and Greens Bayou asing 13 curves between Morgan Point and Brady Island; substitution of linton Island turning basin (40 by 500 by 900 feet) for the Brady Island g basin; etc.

rovement of these waterways is urgently required to accommodate the tankers ranging up to 85,000 deadweight tons now in existence. The us 36-foot project dimensions were designed to accommodate vessels of anker size and are entirely inadequate to permit safe and economical tion of the larger tankers of 28,000 deadweight tons and over. The gs from the use of the larger tankers on the Houston ship channel would d $4 million annually.

› institute recommends that the amount of $3 million be appropriated to te the deepening and rectification of the channel and easing of the bends en Morgan Point and Brady Island.

acramento River deepwater ship channel, California

è Sacramento River deepwater ship channel is an important commercial way on the west coast. The institute agrees that the amount recomed in the President's budget estimate, namely $8 million, should be proto initiate and continue channel excavation and construction of the lock -ridge.

aquina Bay and Harbor, Oreg.

e authorized project provides for extending the jetties, deepening the bar outer end of the entrance channel to 40 feet for a general width of 400 deepening the channel to 30 feet thence to the turning basin for a width O feet, etc.

order to make Newport, Oreg., a first-class port for shipment of lumber to east coast, the channels should be improved to accommodate the large › vessels presently using them. The benefits to be derived from the imement has been evaluated at over $1 million annually with a benefit-cost of 1.4 to 1.

e institute, therefore, recommends an appropriation of $300,000 for the ng fiscal year to enable the Corps of Engineers to continue the planning he project and explore the excavation areas on the bar channel.

Freat Lakes connecting channels

e St. Lawrence Seaway with a controlling depth of 27 feet from Montreal ke Erie has been completed and has been opened for navigation of deep-draft going vessels in the spring of 1959. The recommendation of the Corps of neers that a plan of improvement be authorized for the Great Lakes conng channels to provide for a minimum depth of 27 feet below low water n with a resulting safe vessel draft of 25.5 feet for Great Lakes bulk carwas authorized in March 1956. The work is planned for completion so provide a controlling depth of 27 feet in all of the channels between the above Lake Erie by June 1962. The entire program for deepening the t Lakes connecting channels is planned for completion by 1963.

e member companies of the institute own and operate nearly 70 percent e oceangoing tonnage registered under the U.S. flag. Certain of our memhave already formulated definite plans for operating oceangoing vessels

to and from ports on the Great Lakes, while others are giving serious consideration to this operation.

The institute, therefore, urges that $30 million be appropriated for construction work on these connecting channels during the next fiscal year. The provision of this money will enable dredging work to continue under existing contracts and initiate new contracts in the St. Mary's River, St. Clair River, and Detroit River.

GENERAL

The major tanker operators have over $1 billion invested in the new supertankers now afloat or under construction. The full value of these tankers to the national economy is not now being realized under the loading handicaps imposed by those channels of inadequate depth and width. It seems to us im perative that direct and immediate action should be taken to complete these major loading and unloading port projects within the earliest practicable time. The benefits from the use of the large tankers in the completed deep-we ports would be far reaching since their employment at full capacity would resalt in corresponding savings in transportation costs. There is no type of harbor improvement from which the benefits are more promptly realized and none in which the benefits are as great as those involving the movement of crude oil and crude oil products and other bulk commodities such as ore from foreig sources.

Since the trend is for the use of the larger and newer vessels because of the economy realized in their use, it is incumbent upon the Congress to provide adequate funds to the Corps of Engineers for further navigation studies in those waterways where the larger vessels are being used. The Corps of E gineers requires $35,000 in survey funds for a review of the Sabine-Neches Waterway which must be increased in dimensions to accommodate the new, economical deep-draft vessels which are now and will in the near future use the facilities. The Congress should provide the funds required for the study. In December 1959 the New York district engineer, Corps of Engineers, U.S. Army, commenced a review study of Newark Bay and Passaic River channels to determine improvements that should be made in these waterways so as to meet the needs of present and future commerce and large oceangoing vessels, particularly tankers. In order that the study may be completed within the 2-year period commencing July 1, 1959, as originally planned, the balance of the amount required for this study, namely $36,000, should be appropriated for the fiscal year commencing July 1, 1960.

The institute also recommends that in order to enable the Corps of Engineers. U.S. Army, to complete their surveys and studies with respect to (1) increasing the navigable area at the junction of Buttermilk, Anchorage, and Red Hook Channels in New York Harbor and (2) dredging certain New York Harbor an chorage areas to relieve congestion and accommodate more vessels, there be provided $9,200 and $21,000, respectively, for the forthcoming fiscal year.

CHANNEL MAINTENANCE

It is not enough that the authorized projects be carried to completion. Once the channel improvements are completed, they are committed to the use of deeper draft vessels and to the loading of the ships to the fullest extent of their capabilities. If channels are allowed to deteriorate and navigable depths are decreased by silting, great inconvenience and loss will be experienced. As an example, Calcasieu River and Pass, La., which has an authorized project depth of 35 feet has shoaled in certain reaches to the extent that T-2 type vessels with draft of almost 31 feet have bottom trouble and the 32,000 deadweight ton tankers with about 33-foot draft require assistance of two tugs to clear the shoal areas.

The institute also requests that maintenance funds to restore project depth and width be appropriated for such important navigation projects as Charleston Harbor, S.C., Delaware River, Philadelphia to the sea; New York and New Jersey Channels, especially in the Kills; and the Port Arthur turning basin. Maintenance funds for these projects will insure the efficient and economic use of the deepwater channels on the east, gulf, and west coasts.

WEDNESDAY, APRIL 13, 1960,

OPPOSITION OF RAILROADS TO CERTAIN NAVIGATION PROJECTS

WITNESSES

DOSWELL GULLATT, ASSISTANT TO VICE PRESIDENT (WATERWAYS), ASSOCIATION OF AMERICAN RAILROADS

PROF. CECIL B. HAVER

Mr. CANNON. Association of American Railroads, Colonel Gullar. You are opposed to certain navigation projects?

Mr. GULLATT. Certain ones; yes, sir.

Mr. CANNON. You may proceed.

Mr. GULLATT. My name is Doswell Gullatt, assistant to the vi president of the Association of American Railroads. Mr. Cannot.i have a statement which I would like to introduce and have printed: the record, and make a few remarks with reference to it.

Mr. CANNON. It will be made a part of the record now, and you make such comments as you care to.

(Mr. Gullatt's prepared statement follows:)

The railroad industry is appearing today in opposition to the making of app priations for the furtherance of certain navigation projects as is detailed statements that have been or will be filed with this committee. The railroad industry will continue to oppose navigation projects built at public expense fut which there is inadequate economic justification.

In my remarks today I should like first to clarify for the record the basis of the industry's opposition in these cases and then to discuss what we consider to be the procedural shortcomings of the Corps of Engineers, which has a majo responsibility for giving the Congress the facts on which it must base its decisi whether or not to spend public funds for navigation. In the course of cor menting on what I consider the failure of the corps to fulfill this responsibly in certain respects, I will make reference to particular projects which are before you.

For some years the proponents of navigation projects in general, and the Corps of Engineers in particular, have tried to convince the Congress and the pub that the railroad industry is unreasonably opposed to the authorization, e struction and maintenance of all navigation projects at Federal expense. This is not so. The railroad industry has not opposed the expenditure of pubar moneys for navigation when realistic and factual analysis shows that the proje is economically justified. The railroad industry does feel that adequate use charges should be assessed upon this Federal service for navigation, in order to make it self-supporting. The industry does oppose those projects and related expenditures which are not economically justified. Of course, it is possible for the Corps of Engineers to honestly disagree with the railroad view as to the justification. However, the practice of the Corps of Engineers of withholding the traffic data and barge rate factors with transfer costs and other data which were developed by it and used to justify the recommendations for Federal ex penditures is arbitrary and impugns the validity of the justification claimed In attempting conscientious economic analyses of various navigation projects the railroads have been considerably hampered by the refusal of the Corps of Engineers to make full and candid disclosure of all the facts and assumptions on which its economic evaluations are based. If the estimates made by the corps are right, there should be no objection to disclosure of the facts on which they are based. And if those estimates are wrong, the Congress and the publi obviously should know why. For these reasons it seems clear to us that we-and any other interested party-should be accorded the privilege of examining and considering the bases and the supporting data on which a vast expenditure of public funds may be made. The very questionable character of some of the corps' reports was recognized by the subcommittee of the Committee on Appro priations, House of Representatives, 82d Congress of 1951 and 1952, and by the

thereon, issued on September 18, 1951, and July 2, 1952, which are ed "Proposed Tennessee-Tombigbee Waterway" and "Missouri River 1 Stabilization and Navigation Project." These reports contain stateof the congressional committees that:

as the construction cost of the proposed project, as used by the Corps neers in their computation of the benefit-cost ratio, is unrealistic, the omputation of benefits is out of touch with reality" (p. 6 of 1951 report). ; apparent that the Corps of Engineers has treated known facts with to this Missouri River project most lightly, in some instances recklessly. amittee is thoroughly dissatisfied with the corps' performance, and feels ch substantial doubt has been cast upon the corps' methods that their are hardly worthy of credence" (p. 6 of 1952 report).

findings are equally applicable to the economic justification claimed by ps of Engineers for the Alabama-Coosa Rivers, Arkansas River, crossbarge canal, and Ouachita-Black Rivers navigation projects. xample of a basic economic evaluation made by the corps without subtion and known to us appears in connection with the Arkansas River This committee will recall that the original estimate of the annual of commerce on this project was 9 million tons and the estimated transon saving expected to result from the project was $19 million. In 1954, r, the corps increased these figures to 13 million tons and $40 million ses of approximately 45 percent and 100 percent, respectively). of these new estimates has ever been substantiated in any form. understand how this Congress can be expected to make a decision on this ginal project on the basis of these changes, which the corps admitted adequate, since it had neither the time nor the money to prepare a survey The corps further withholds essential data from public inspection. ill the corps not produce the point-to-point traffic data and its constructed ates to prove its purported justification? The hard fact is that no justiin this respect has even been attempted and expenditure of public funds t such justification is plainly wrong.

Yet
We

of the major deficiencies of the corps in evaluating and recommending ion projects is its practice of accepting without apparent question many cantiated estimates of future tonnage made by proponents of navigation s. These questionable estimates are then used by the corps as the bases ch to predicate the traffic and to determine the average annual volumes merce expected to obtain during the useful life of the projects. In respect Big Sandy River-Tug and Levisa Forks navigation project and the Tennesbigee Rivers, for example, the estimates furnished by the proponents and relied on by the Corps of Engineers were later repudiated by the very who had made them. This is fully documented by the reports issued by committee of the Committee on Appropriations, House of Representatives, ngress, 1st session, on September 18, 1951, in connection with the TenTombigbee Rivers navigation project, as well as by the hearings held by mmittee on Rivers and Harbors, House of Representatives, 79th Congress, sion, in connection with the Big Sandy River-Tug and Levisa Forks naviproject.

her major deficiency of the corps respecting navigation projects is its nt use of constructed barge rates which bear little, if any, resemblance actual barge rates which are published, maintained, and used by the on existing inland waterways. This was the case as respects the evaluathe Tennessee-Tombigbee project, to take only a single example. There ess for the Corps of Engineers admitted, only after being severely pressed nsel for the congressional investigation committee, that published barge were greater than we assumed." Obviously, to the extent that realistic tual rates are greater than the constructed rates used by the Corps of ers, the transportation savings differential is falsely distorted upward. urth basic error on the part of the corps is its failure to adjust the estitransportation savings of any waterway project for the diversion of rom existing agencies of transportation to the new water carriers which e the project. The corps quite freely admits this practice (see Annual Chief of Engineers, for 1951, p. 299, pt. I, vol. 3), yet it is clearly ir1 and arbitrary. It was only by the adherence to this irrational policy that affic potential could be established by the Corps of Engineers for the a-Coosa Rivers navigation project. This fact is confirmed on page 12 survey report issued on this project under date of July 1, 1958, wherein