ir analysis we examined each and every assumption upon which these rest. Any tendency to overcost the alternative source of power will have ect of increasing the power benefit of a proposed hydro project; conunderestimating costs of alternative power sources will unjustifiably dethe benefits of a proposed project. actors analyzed have the collective effect of depressing expected "power" by 47 percent. That is, the alternative costs (benefit to hydro) that the hould be estimating for the proposed hydroelectric development on the a River is $2,499,500 rather than $4,715,000. This estimate assumes a ent alternative cost for capital, thereby putting the private steamplant equivalent basis with public hydro. By using 51⁄2 percent interest, the tive costs would be decreased 34 percent to $3,111,900. 47 percent adjustment is arrived at as follows: (1) changing the plant to 65 from the unrealistic 51.3 percent suggested by the Federal Power sion-this cuts the alternative costs 12 percent, (2) changing the heat that of modern thermal units rather than the average of existing units the Federal Power Commission-this cuts alternative costs 2.7 percent, ucing fuel costs by 10 percent thereby decreasing alternative costs by 3 (4) discarding the implicit assumption of constant technology and that the historic technological growth rate will continue this reduces d alternative costs by 16 percent, (5) resource prices should be uniform 1 public and private alternatives; i.e., either price capital in private tives at the Government borrowing rate or alternatively use the social t rate for both public and private alternatives this reduces alternasts by 12.8 percent, (6) include all implicit costs like insurance on both efit and cost sides of the benefit-cost ratio-this reduces alternative costs f 1 percent. Other adjustments of alternative costs should be made but a on the case was incomplete and the exact assumptions used by the of Engineers on certain items were not known. However, we feel that ve analysis substantiates and justifies the adjustments presented. Corps of Engineers did not provide in its analysis, nor would it provide request, a cost allocation for the Millers Ferry and Jones Bluff multiplewater projects. A cursory analysis of the data supplied by the corps d a basis for the allocation of 51 percent of the annual costs to power percent to navigation, on which basis the annual costs attributable to re $3,333,800. benefit-cost ratio for power alone is 0.75 to 1. If the costs allocated to re less than those calculated above, the ratio would be somewhat higher. er, the implication from this analysis is clear, Federal power development Alabama River at Jones Bluff and Millers Ferry is not economically 1. The benefits to whomsoever they accrue do not exceed the costs. e wishes to consider the assumption of differentially pricing capital in ver project, namely, pricing the Federal hydro development at 21⁄2 perd the alternative private steam plant at 51⁄2 percent, the benefit-cost still only 0.93 to 1. e adjusts the annual charges attributable to the power investment in the to a discount rate more nearly approximating the social cost of capital, .5 percent, we obtain a benefit-cost ratio of 0.5 to 1. This assumption the same conclusion, that the proposed multiple-purpose projects at Ferry and Jones Bluff are not economically feasible from the standpoint power aspects nor are they feasible from the standpoint of their naviganetions, and further they are not feasible when the two functions are ogether. ic growth and waterway investments water resources studies throw some light on the very pertinent question ing the relationship of navigation investments to economic growth. income and the state of economic development of a region can be exto affect the volume of its trade in products and supplies with other some anticipation of future economic development in the Arkansas Valis important in projections of barge traffic on the proposed navigable btedly, the location of early economic development in this country was ed by water for industrial uses and transportation. A pertinent queswever, is: Does the relative rate of economic growth among localities country bear any relation to the present public expenditures for navigaelopment? In an effort to shed some light on this question, several cities, with and without inland waterway navigation, were selected for comparing population and economic growth since 1940. The results obtained from the tabulation of seeondary data are presented in the following table: Comparison of population and industrial growth of selected cities, 1940–54 1 Cities of Memphis, Louisville, Birmingham, Nashville, Knoxville, Chattanooga, Baton Rou Paducah. 2 Cities of Dallas, Fort Worth, Oklahoma City, Wichita, Tulsa, Little Rock (including North La Rock), Springfield (Mo.) and Fort Smith. Cities of Atlanta, Jackson, Roanoke, Winston-Salem, and Raleigh. Source: Department of Commerce, "A Statistical Abstract Supplement, County and City Data k 1952 and 1956. This table presents an interesting comparison of population and econorar (industrial) growth of cities with and without navigable waterways. Th results suggest that the conclusions implied in the statements of the Cas of Engineers regarding the impacts of current navigation development shook be questioned. Southeastern cities that were on waterways, which had a s and stage of industrialization disadvantage in 1940 and 1947, respectively, and without navigation, progressed at about the same rate in population increas but at a higher rate in industrial growth than the cities with navigation dur the recent periods considered. Also, cities in the Southwest, many in the ar of the proposed Arkansas River development (during the periods considered grew more rapidly in both population and in industrialization than the South east cities with available navigation. In projecting traffic on the Arkansas River in the advent of navigation de velopment, it is proper to consider some allowance for economic developme of the area. Generally, we assume a growth of 3 percent per year, which s the historical trend in cross national product of the United States. However, also take into account individual industry trends, nationally and within area, in the commodity projections. WEDNESDAY, APRIL 13, 1960. KENTUCKY WOODLANDS NATIONAL REFUGE-BARKLEY DAM WITNESS MRS. CORINNE R. WHITEHEAD, LYON COUNTY, KY. Mr. CANNON. Mrs. Whitehead, I believe you wish to be heard the Kentucky Woodlands National Refuge-Barkley Dam? Mrs. WHITEHEAD. Mr. Chairman, I do not represent the Lyon Howing Commission. I represent an organization of local property own ers in Lyon County who over the past several years have attempted to lp achieve a land replacement program for the Kentucky Woodads that would be to the interest of the local people and at the same ne provide for the optimum development of the Kentucky Woodds. Mr. CANNON. You may proceed. Mrs. WHITEHEAD. I have two letters from individuals that I would e to be made a part of the record at this point. Mr. CANNON. They will be included in the record at this point. (The letters referred to follow :) n. CLARENCE CANNON, LYON COUNTY HERALD, Eddyville, Ky., April 11, 1960. airman, Appropriations Committee on Public Works, ashington, D.C. DEAR SIR: As editor and publisher of the local newspaper, I served as pubity chairman for the Inter-Lake Protective Associates while that organization is pressing for revision of the proposed land acquisition program for replacent lands for Kentucky Woodlands Refuge. The Fish and Wildlife Service were at all times understanding and cooperative th our local people in formulating a program which would serve the common jectives of the Kentucky Woodlands Refuge and local interests. I urge that funds for the Kentucky Woodlands land replacement be apopriated. Sincerely yours, W. T. DAVIS, Editor. MURRAY STATE COLLEGE, ›n. CLARENCE CANNON, airman, Committee on Appropriations for Public Works, ashington, D.C. DEAR MR. CANNON: It is my understanding that there is some opposition to rrying out an agreement which was entered into between the Corps of Engiers and the Fish and Wildlife Service regarding replacement of land lost to e Kentucky Woodlands Wildlife Refuge by flooding of 44,000 acres of Cumberad River bottom land to form Barkley Lake. I deem it highly important that the agreement between these two Federal encies be carried out. The land known as the Pleasant Valley area is surunded by refuge land and should be acquired by the refuge in accordance th the agreement. Its acquisition would not only give the refuge a solid block territory but would help solve some problems such as poaching and bootrging. I hope you will use your influence to see that no interference with the agreeent be permitted. Very sincerely, A. M. WOLFSON, Head, Department of Biological Sciences. Mrs. WHITEHEAD. Mr. Chairman, members of the committee, my me is Corinne Whitehead. I am a resident of Lyon County, Ky. y interest in this appropriation stems from my having served as airman of an organization composed of property owners in the between the rivers" area. It has been our goal to help achieve a landplacement plan that would serve the interest of our local people and the same time provide for the optimum development of the Kencky Woodlands. This statement reflects our views on the U.S. Army Corps of Engiers Barkley Lake and Dam project and the relationship of that oject to important economic and esthetic values associated with the tural and historical aspects of our area. The land between the rivers is steeped in historical significance. It is the birthplace of the mighty steel industry of today. This was the land of the Indian, pioneer, and the teeming boom communities of the early iron ore miners. It was in our county that William Kelly, whe developed the famous Bessemer process for the making of steel, drew the plans and designs for the iron furnaces. Some of his experiments were conducted at the only remaining early furnace which is located in Kentucky Woodlands Refuge. This was the land of abunda natural resources-forests, water, minerals, and wild game. Today our earlier resources are gone, but in their place we have other newer resources-manmade lakes, new young forests, productive land, famed historical landmarks, and once again growing populations of wildlife. Kentucky Dam already has been constructed on the Tennessee, and Barkley Dam now is being completed on the Cumberland. The area long known as the land between the rivers is soon to be bounded by two immense lakes. The U.S. Fish and Wildlife Service now has refuge on lands where the iron ore boom once reached its peak Prolific fish and wildlife populations again frequent the lakes and streams and reforested hill and bottom lands. The opportunities economic and recreational development in this section are immeas able. The areas influenced by Kentucky and Barkley Lakes will have a recreational visitor-use potential of several million people annually This visitation has large economic significance and would be directi related to historical and natural attractions. To realize this potertial, wise land-use planning will be necessary. Let me begin by stressing the need for maintaining the Kentucky Woodlands National Wildlife Refuge. Over the years, the presence and operation of this refuge unit has been primarily responsible for preserving and developing natur and historical values which have clearly enhanced surrounding areas With impoundment of Barkley Lake, large areas of refuge bottor land will be lost. There is a need for replacing these lost land if future public use opportunities and related economic benefits are tr be fully realized. It is commendable that the 83d Congress, by passage of the R and Harbor Act of 1954, recognized the need for continued operati of the Kentucky Woodlands Refuge by specifying that refuge las lost through construction of Barkley Lake should be replaced. Its noteworthy to mention at this point that our distinguished Senato Cooper and Clements, during hearings on the matter, spoke out it wholehearted endorsement of the land-replacement provision. Concurring with the River and Harbor Act of 1954, the Nashville district engineer, Corps of Engineers, and the regional director. Bureau of Sport Fisheries and Wildlife, by an agreement of May 1 1958, set aside lands within and adjacent to the present refuge site and within project boundaries on the Cumberland River near Dover Tenn., to replace these lost lands and thus assure the continued oper ation of this commendable and valuable conservation endeavor. The end result would be the greatest good for the greatest number The replacement plan was authorized by congressional directive and has been designed to affect the least possible hardship on affected peoples. In this connection, I am informed that the Fish and Wildife Service will consider trading certain lands lying south of U.S. highway 68 for portions of land required for replacement purposes. The point has been raised that the land-replacement plan will reult in tax losses to the counties involved. I do not believe the acquisiion of 5,300 acres of land in Lyon and Trigg Counties will seriously ffect the counties' tax structure. The tax losses on lands to be cquired for the refuge will amount to about $600 per year in Lyon County and about $1,400 per year in Trigg County. In contrast, yon and Trigg Counties received about $30,000 during 1959 from he sale of timber on the refuge. We have recently been assured each ounty will continue to receive substantial sums from annual timber ales resulting from maturity of the refuge timber-management program. I believe this sustained revenue will more than replace any pparent tax loss. With Kentucky Woodlands Refuge located in almost exactly the population center of the United States, I foresee many opportunities or the enhancement of public benefits in the management of refuge reas and Barkley project lands in connection with the development of our national resources. With a continued, efficient refuge operaion, many areas of natural attractiveness and educational import will e available for public enjoyment. Historical sites and facilities for oating, picnicking, camping, nature study, and group activities, such s Boy Scout programs and school field trips would be made availble. These things will serve to fulfill a rapidly growing need for ecreational outlets for our citizens. Therefore, I request that this committee, consistent with the River nd Harbor Act of 1954, approve plans prepared by the Fish and Wildlife Service for the replacement of refuge lands and the reloation of facilities thereon. It is recommended that authorized funds or these purposes be retained as a Barkley Dam and Reservoir cost. It is further urged that the replacement lands be acquired this year o that refuge replacements and the transition of wildlife to new reas can be accomplished prior to complete clearing of Barkley Reservoir bottom lands. Mr. CANNON. Thank you, Mrs. Whithead. WEDNESDAY, APRIL 13, 1960. WILKESBORO RESERVOIR WITNESS HON. A. PAUL KITCHIN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NORTH CAROLINA Mr. CANNON. We will now hear from Congressman Kitchin, of North Carolina. I believe that you wish to be heard on the Wilkesporo Reservoir. Mr. KITCHIN. That is right. I am not going to take much of your ime because I think most of the gentlemen of the committee are at east familiar with this particular project. It has been in the offing or many years. It has progressed to the point now that the contruction fund as allocated last under the appropriation act will be |