form of transportation, several Sioux City firms have invested $160,000 new barges, to be in service within 30 days, and a large towboat, wh financed locally, and has been working on the Missouri River from Sio south.

Enclosed with this statement is a copy of an economic survey conducte waterways committee. Close examination of the facts included in th gives a complete picture of the potential development which can result f Federal Government's investment in this project.

We urge the early completion of the authorized 9-foot navigation ch Sioux City, Iowa, and oppose any legislation which would limit the any portion of the authorized navigation channel to less than the 9-foo We also urge the early completion of a survey report on the engineer economic feasibility of navigation above Sioux City, Iowa.

REPORT ON AREA ECONOMIC ADVANTAGES OF MISSOURI

NAVIGATION

(By Waterways Committee, Sioux City Chamber of Commerce, Sioux City PREFACE

There has been much conversation and some speculation concerni economic advantages to the Sioux City, Iowa, area, which includes north Iowa, northern Nebraska, southwestern Minnesota, and South Dakota, navigation on the Missouri River. River navigation, as used in this means a 9-foot channel from the mouth of the Missouri River to Sioux Ci November 9, 1959, Chairman T. M. Whicher of the waterways committee Sioux City Chamber of Commerce appointed a subcommittee to study submit a written report on such advantages. Because of time limitatio investigations and research of this subcommittee have necessarily been 1 However, the following material is the present report of the subcommitt it is hoped that areas of economic advantage, by reason of this report, more clearly defined and supported.

This report considers three areas of economic advantage, to wit:

I. Freight rate advantages.

II. Industrial development.

III. Agricultural marketing advantages.

I. FREIGHT RATE ADVANTAGES

IMPORTANCE OF FREIGHT RATES

Freight rates are merely the cost of moving material and products fr point to another. Such costs represent a large portion of the total price of It should be realized that transportation costs are passed on to the u consumer and, therefore, where high freight rates are encountered, the co must pay higher prices for his goods.

It has always been important that cities and areas competitive wit other be on an equal basis. If they are not on an equal basis, the one lower rates will enjoy an advantage over the other. The importance o equalization can be seen by the development of this Nation. Most larg were developed because of their geographical location. This location was mined because of natural transportation routes or junction. The same which were originally founded because of their transportation advantag tinue today to increase at a much faster pace than other cities not so fa located.

EFFECT OF BARGE TRANSPORTATION

Barge transportation has only one thing to offer, that is very low rates. cities having low-cost barge transportation enjoy an advantage that is ext difficult for competitors not having such service to overcome. Barge trans tion enables those located on waterways to take business away from th peting areas and eventually develop to the extent that the barge po monopolize entire sections of the country in selling certain commodities. a situation now exists. As an example of this situation, the southeastern s of the United States is a very heavy consumer of grains used for poultr livestock feed. The major markets located on the Mississippi River, på

Minneapolis and Chicago, by use of barge to ports such as Memphis, Tenn., rail or truck movement beyond, have captured the great preponderance this business.

Such advantages attract industry. Industry is naturally going to locate expand at points having water transportation. Such expansion causes her cycle to begin, by attracting more barge operators, heavier volume, and lower water rates. This causes the business in that area to increase and attract additional industry and local expansion.

e favored cities and areas receive advantages as a by-product of water portation. This is particularly true of the grain business. As an example, jor grain-marketing center that can only use railroads for outbound shipmust use railroads to move the grain inbound from the country proing points. This is necessitated by the rail-rate structure. Markets having ailable water transportation for outbbound movements need not observe this quirement. They can employ truck transportation for their inbound grain. ormally trucks can haul the grain from the country gathering points to the arkets cheaper than railroads. This has been done extensively in many fastness. When the trucks haul large volumes of grain to a market, the milos then reduce their rates from these country producing points to the marke This gives such markets an additional advantage. The railroads are tried to give comparable reductions from the country origins to markets tring water transportation. They know that such markets cannot use tract grain because there is no way of shipping it outbound except by railroad. This situation increases the disadvantage of markets not having available water

transportation.

The Mississippi River is fully developed and the barge operation is full scale and tremendous. Such points as Minneapolis have used barge transportation to fullest and continue today to outstrip any city or market west of there in erving large areas of the United States.

STATUS OF MISSOURI RIVER CITIES

Barge operation on the Missouri River is comparatively new. The natural development of navigation on the Missouri extended from the mouth of this river to Kansas City and in the past 2 years to Omaha, Nebr. Kansas City has available a better channel than Omaha. Omaha has available a better channel than Sioux City.

Kansas City and Omaha are now beginning to realize the advantages of the low-cost barge transportation. While the channel is not completed, a sizeable barge operation has developed with the resulting increase in business and industry. Omaha, Nebr., is increasing its barge movement yearly and it, too, is now realizing many advantages.

The importance of continued and rapid development of the Missouri River Channel to its completion is extremely important to those of us located on this

We are literally in a life and death struggle with points on the MissisIllinois, Ohio, and other eastern rivers. Those points have developed gation to its utmost and are reaping tremendous benefits. By having low rates these areas to the east have left practically every other State to Test on a high plateau, ratewise. We cannot hope to lower this plateau by the same means, namely, lower water rates. If navigation on the ri River is not progressed, we will most certainly see industry looking else

for its locations.

STATUS OF SIOUX CITY

City, through the efforts of its local citizens, has had pioneering and barge operations. While these have been very limited, they show the endous potential that reliable and consistent barge transportation will on Sioux City and its surrounding area.

These small movements have done much to encourage barge transportation, we must look toward the rapid completion of the channel between Sioux and Omaha. This is needed in many ways. Sioux City cannot hope to pete with the other major barge terminals, even Omaha and Kansas City, we have a regular barge service. While other cities have low barge rates, City must sit and watch the business go to such other cities. We have ked diligently and hard, trying to get the railroads to afford us a measure relief in the rail rates so that we, too, could enjoy the business we formerly

had. To date we have met with very little success and the prospects for rail rates are far from encouraging.

This tells us in no uncertain terms that it is of the utmost importa barge transportation be put into operation at the earliest possible date. The potential mentioned above was seen each time our token operatio about. Industries sent out questionaires requesting information on t ation and asking if we could handle their goods. We were forced them down, asking them to keep us in mind until we, too, could offer Advantages extend to areas surrounding barge ports. It should be and realized that the advantages accruing to cities having barge servic limited to only those industries or people located at that particul The advantages extend far out into the surrounding territory. A good of this can be given on grain. Sioux City is major grain market. V gather supplies of grain from the small country elevators, who in tu get their supplies from the farmer. If Sioux City had low barge rate able, it would then be able to compete with the other cities moving g barge. When a Sioux City grain dealer has a barge movement in th he would go out to the country elevators and offer them a higher pri he would otherwise be able to offer due to the lower barge rate. The man in turn could offer a higher price to the farmer. This situation extend to all of the farmers in the area.

If Sioux City had actual barge transportation, it would be a simple m cite specific examples where, due to this barge service, a particular fa group of farmers received a certain amount for their grain over and abo they can be offered today.

The benefits are not limited to grain, this in only one of many comm which will move by barge. For example, ingredients of feed moves by to many points. The savings in freight is then passed on to the farmer way of lower prices on finished feed. Other articles would also tend the entire area. Steel is an item that moves in large quantities and in almost every type of construction, such as schools, highways, and oth lic enterprises which the taxpayer must ultimately pay for.

RATE COMPARISONS

The attached rate comparison is submitted to given an idea of the adva of low water rates. Barge rates shown on this exhibit are those pr available. when barges can operate, from Sioux City. They are consi higher than they will be when we have a completed channel and re maximum loading of barges. Even so, it shows that a tremendous in transportation costs can be realized even under the adverse condit the present operation.

Other commodities such as salt, feed, fertilizer materials, coal, m petroleum and petroleum products will move in large quantities.

1 Barge rates include estimated charge for unloading from or to truck or rail car at dock site.

II. INDUSTRIAL DEVELOPMENT

Making a 9-foot channel to Sioux City can give the Siouxland area, encomang over 59 counties, that creative impetus needed to expand in line with rest of the Nation.

ater based freight rates can cure a basic problem of Sioux City and a area which includes Sioux Falls, S.D., South Dakota's major city. ests $1.25 a hundredweight to lay a boxcar of lumber from Washington into a Sioux City lumberyard. It costs only $1.60 a hundredweight to a similar boxcar of lumber from Washington State into a Miami, Fla., eryard, in spite of the fact the lumber travels almost 2,000 more miles by rail Mami. Clearly, Miami basks under a sun of water based freight rates. ster based freight rates mean diversified industries, and diversified indusmeans a more stable development.

The loss of population in the rural area surrounding Sioux City has created tremendous economic, sociological and governmental problems. The only way with the area population shrinkage can be halted, State tax bases broadened and tomies bolstered is to provide additional jobs in diversified industries. Industrial development groups, during recent years, have intensified their orts and many cities in this area have shown remarkable results. The Increases of job opportunities in the area of Minneapolis, Omaha, and Kansas City have had far-reaching effects on not only the metropolitan areas themsites, but on many small communities throughout their trade areas. In many as a major industrial facility, located in a population center, results in the leon of satellite or small supporting units in surrounding small towns. Of the 59 counties in four States served by Sioux City, 73 percent lost populate between 1940 and 1950. Much of this loss was from consolidation of farms, bur most of the population loss did not migrate to area cities, but to Minneapolis. Kansas City, Omaha, California, and wherever, but mostly to places that have the advantage of water based freight rates.

New jobs have been created by Sioux City's fast growing packing industry, but nor nearly enough to provide jobs for those "forced off farmers."

Sy itself maintained an almost stable population having 82,000 in 1940 and $1000 in 1950. This is in the face of marked explosive growth of almost all retropolitan areas throughout the Nation. Sioux City's major handicapo strating new industry is the lack of navigable waterway to allow for eficient kast movement of bulk commodities.

They counties in the area that have not shown a marked population decrease are those which have expanded their industrial base.

Gerald Nordquist, State University of Iowa economist, in a research report published in July of 1959 in the Iowa Business Digest, stated "A lack of basic nonfarm lastry will continue to slow the productive income and population growth of northwestern Iowa in comparison with the rest of the Nation. Northwest Iowa, in 1954, accounted for only 12 percent of the State's manufacturing employment, a proportion that hasn't changed much since World War I. The dazer to Sioux City's area can be shown by a U.S. Department of nerve report which shows that while the Nation lost 45 percent of its per during the depression of the 1930's Iowa lost 55 percent, Minnepercent, and North and South Dokota approximately 60 percent. The City area is tied to the farm economy and goes up and down with farm

ess and income.

affected by water based freight rates, of course, are bulk commodities. present hopes of a 6- and 9-foot channel to Sioux City, grain and feed have bought land on the Missouri River waterfront. Within recent years. ental Grain Corp. Cargills, Bartlett Co., Terminal Grain Co., and Central Co. have bought such land. Two other firms presently have land under

is not expected that any of these companies will initiate building programs this waterway is made navigable. The grain industry is not the only segment of the economy that would benefit navigation, however. Inquiries have also been received from firms desiring harge into this distribution center. Some such firms are in the steel, sugar, ical, binder twine, scrap iron, salt, fertilizer, and petroleum industries. For most of these commodities would be destined for distribution to the market. Other materials would go to the area's existing manufacturers

and provide cost savings which would allow them to expand their ma allowing them to expand and provide additional jobs.

From an economic and industrial development standpoint, making ba ments feasible on the Missouri River is essential to the area's well-bei Sioux City and the surrounding area would benefit is not a matter of c Recent purchases of industrial land along the river at Sioux City project is both needed and practical.

With our economy at dead center or less than stable because of its dependent on the farm economy, any impetus, such as the 9-foot cha have a major beneficial effect.

An example of what water based freight rates can mean is best ta a report made by a William Lohry, operator of a farm supply firm in S that distributes its wares all over the 59 counties and into North Dak nesota, and Montana as well. His report, made before the Coordinat mittee on Missouri River Main Stem Reservoir Operations, April 30, 19 out the tremendous savings to businessmen, farmers, and ultimately c both in the Sioux City area and nationally as well. He estimated tha of water based freight rates to Omaha on bulk molasses alone, there nual savings in Sioux City of more than $70,000. And that $70,000 obvio passed on because many different firms handle molasses and so feed m less, farmers paid less and everyone benefited.

The decline in population means that the area has an excess labo which lowers the wages paid, which lowers taxes paid and probably 1 slightly worse off than other areas. The farm population loss means th City's and the area's retail stores do not have as many potential cu that our manufacturers for area consumption do not have as many customers or job openings. It means that per capita taxes must rise to the same services such as schools, roads, and the like, throwing an extr on those remaining individuals, businesses, and manufacturers.

In order to not remain an "underdeveloped area on the globe," Sioux the area must have competitive transportation costs and a water outl tional and international markets through the inland waterways system City and the area needs, must have a 9-foot channel.

FACTS ABOUT NORTHWEST IOWA

Changes in Iowa Population by Roy E. Wakely, Research Bulletin vember 1957, Ames, Iowa.

Current Population Reports, Bureau of the Census.

The Journal of America, Chamber of Commerce Executives, October "What Amazing Changes in U.S. Agriculture May Mean to Your Commu U. S. Department of Commerce.

Iowa Business Digest, State University of Iowa, December 1953.

Sioux City Industrial Development Council.

Rural-Urban Migration in Iowa, 1940-50, from Ames Research Bull April 1954.

Sioux City Traffic Bureau.

III. AGRICULTURAL MARKETING ADVANTAGES

A. GRAIN PRODUCTION AND STORAGE

In 1958, farmers located within 75 miles of Sioux City produced & million more bushels of grain than the area could consume. This grai be shipped from this territory to market or be taken over by the COC u of our Government programs. The availability of a 9-foot channel fro City southward on the Missouri River would provide this area cheape portation to deficit areas and export markets. One effect of the cheape portation will be to pass on to farmers higher prices for their grain, m sible by expanded markets because of more competitive prices. A seco would be to save inestimable sums of money for the Government, becɛ greater quantities of the grain produced in this area could be sold in t petitive free market thereby relieving the Government of the costly nece acquiring the grain under price support programs. (See following sch