I imagine that you can find every variation.

Mr. KITCHIN. I would like to ask one more question, if you can answer it.

During the emergency of World War II and the Korean conflict, when the Government actually went back into the actual use of these piers, do you know, or do you have any information available whether or not the Government was actually paying dockage and such fees that went to this private corporation, or whether they were utilizing the piers for free?

Mr. DILWORTH. They were paying the Philadelphia Piers, I am sure they were.

Mr. KITCHIN. During the Korean conflict, do you have any information as to what revenues the private corporation received from the Government from the operation of those piers during that era? Mr. DILWORTH. No, sir; I do not.

Personally, I know that in the old days it was a fairly profitable operation and because the Government threw so much work in there, it was our general understanding-

Mr. BENNETT. Do you have some statements from people who could not attend that you would like to include in the record at this point?

Mr. DILWORTH. Yes, sir. They are all here but we did not want to burden you with more people than necessary.

So, I have submitted statements from the Chamber of Commerce of Greater Philadelphia and also the Delaware Valley Council and also the port authority.

Mr. LANKFORD. Mr. Mayor, you have referred to the figure of $3 million and capitalizing the estimated net return of $200,000 at 6.7 percent.

Do you know how the Army comes up with the figure of $4,500,000? They are 50 percent off, or somebody is.

Do you know how the Army arrived at that figure?

Mr. DILWORTH. We do not have any idea, sir, and I have just asked Mr. Schauffler here about that. He has been following this more closely than anybody else in the city government.

I read the report carefully but that does not reveal how they arrived at that figure. It has just been pointed out to me that we do not know if they had any so-called appraisal made.

As Mr. Schad can convince you, an appraisal would be virtually meaningless. It is not like a piece of center city real estate.

Mr. LANKFORD. I have just been informed that the Army has witnesses and they will testify to that.

Mr. BRAY. Is there any representative of Philadelphia Piers, Inc., here?

Mr. DILWORTH. No, sir; they are no longer interested except in their general interest in the port.

Mr. BRAY. Naturally their interest in the port is understandable, They would be somewhat interested in the pier, too?

Mr. DILWORTH. They do not have the money with which to do this. Mr. DURHAM. I talked to Mr. Bradley about this. I thought he was going to speak to the piers.

Mr. DILWORTH. As to the tax angle.

Mr. BRADLEY. And for the Pennsylvania Navigation Commission. Mr. BRAY. I am not familiar with the ownership of the piers, whether they should be owned by the city or by private capital if

they are willing and able to give more for it, but what I was wondering about was this: I would like to know what they will use that pier for if they buy it.

Mr. DILWORTH. We have made a very careful survey and we have now a really excellent port promotion group that is headed up by the executive vice president of the Philadelphia National Bank. It is really a good group and they have made a really extensive search into this thing. The group made up of Philadelphia Piers does not have $7 million to spend.

Mr. BRAY. I think they should be here. They are the users of this pier and it seems to me that we are here leaving out of the record a very important part of this entire matter.

Mr. DILWORTH. They actually gave up some years ago.

In other words, they do not have any capital assets and this group of warehousemen and shippers and shipping interests in Philadelphia, they are not able to put up anything like this kind of money so they really dropped out of the picture.

They are now interested through our port development committee on which nearly all of them have representatives and which, as I say, is now headed up by the executive vice president and which handles all of the foreign business for all of Philadelphia National Bank. It is one of the groups that has really revived private business of the port and the private improvements around the port.

Facilities around the port and shipping facilities, and warehouse facilities had gotten into somewhat bad shape. It is only in the last 6 years that private money through the banks, the chamber of commerce and other interests in the city have been able to help finance and persuade private shipping interests and terminal interests in the port to begin investing their own money again in greatly improving their facilities.

Mr. BRAY. The question I bring up-I never heard of this case until I came into the committee hearing this morning, and I am not informed on it-what impresses me is that we have got to make clear in this record, before the committee approves it and certainly before the House approves it, and especially at this late date when we are looking at everything with a rather jaundiced eye, I was wondering why it did not come up earlier. We have to show that that is a reasonable price and as long as the Army, which I have just been informed casually, places a much higher value on it and in general if there is a buyer-I do not know whether there is or not-that would give $2 million more for this than the city of Philadelphia, I do not quite know what authority or right this committee has to make the donation of $2 million to the city of Philadelphia, regardless of how much we might like the city of Philadelphia.

I think we have to explore this matter.

I guess the Army is here to testify later.

Mr. DILWORTH. Mr. Bray, if there were any private operator in the Philadelphia area willing and able to pay $4.5 million and then put another $2.5 million into this, the city of Philadelphia would never have interested itself at all in this.

We work very closely with our commercial interests, our port interests, and our bank interests. There is no conflict.

In other words, the city has never tried to push private business out of the port operation.

Mr. BRAY. That might be, but we have got to show something to justify that.

Mr. DILWORTH. A very careful survey has been made and I think that Mr. Schad will convince you of that, that there is no private operator in a position to pay that kind of money and the most that you would hope for would be a net return of $200,000 which is no kind of a return on a $7 million investment.

No private operator has come forward and the only possible interest that has been shown is a warehouse group that could convert this and the 25 acres which is on the other side of Delaware Avenue, the big avenue that serves the port, and simply convert it into a warehouse area which would be perfectly terrible as a blow to the port of Philadelphia. It would take 40 percent of our cargo piers out of operation. Mr. BRAY. I am sure that nobody in the committee wants to do anything that will take anything from Philadelphia, but you people already know that this committee has listened to this matter for about an hour already ane there will be discussion on it on the floor of the House.

I just wanted to make that observation.

Mr. O'KONSKI. Are the Boston and Newark deals of several years ago practically identical with what you people are asking for?

Mr. DILWORTH. We originally asked for the Boston formula. That was put in in 1956 and then the Army Department finally came down with its report a little over 6 months ago in which it disapproved the Boston deal and said that in their opinion that had been too generous, but it did not oppose the Newark deal.

The present legislation is really based on the Newark proposition and, again, we think it would be very unfair to put us in a position way below that of Boston and Newark and actually down in Charleston, some years ago

Mr. O KONSKI. You are not asking for anything more than Newark got?

Mr. DILWORTH. That is right; not as much as Boston got and Charleston, S. C., got. Charleston, S. C., got the whole thing for free.

Mr. GREEN. Mr. Mayor, what we are interested in is these particular piers. We want to see that the piers are conserved as a marine terminal and so that somebody does not come along and make warehouses out of them. We do not care what deal we make with the Government. We would be satisfied to lease the piers from the Government and to take care of the maintenance over the years.

Mr. BRAY. I do not think there is any disagreement about that. I would not want anybody to get these piers and not use them.

I think we have got to establish that that is the best price that we can get for these piers and yet allow them to be used for the purpose as piers. That is the only thing I want to do.

Mr. GREEN. Before you came in I read a statement which I will not bother to read again, but I would like to refer to a part of it:

* The threat has arisen, of possible diversion of the facilities to other uses, making secondary the possible monetary loss to the United States through a conveyance subject to a use restricted to a marine terminal.

Mr. BRAY. I think it must be restricted. I agree with you on that. Mr. PRICE. Mr. Chairman, I would like to say this, as one member of the committee: This would appear to me to be a very good invest

ment for the United States Government and particularly for the Defense Establishment because you have to take off the hands of the Government all housekeeping and repair and maintenance costs for the Government and still have ready in the event of an emergency three operating piers that we will not have if we let this thing go without some attention now and revert to a mere warehousing facility. We will save the Government millions of dollars and at the same time not be faced with an acute emergency some day with the Department of the Army running in here in the event of another national emergency pleading for hundreds of millions of dollars to replace these piers.

Mr. DURHAM. If the gentleman would yield at that point, I believe that it was the exact formula used in the Boston case.

Mr. O'KONSKI. Besides the fact that the Army admits it will cost $1,750,000 to put it into shape.

Mr. PRICE. We know that in the event of an emergency

Mr. GREEN. The first thing the Army will want is the piers at Philadelphia.

Mr. DILWORTH. Mr. Bray is properly concerned in wanting to know if everything has been exhausted to get private interests to take these piers over at some price.

Our port development committee formed a pool of banks to try to interest this same group to make a proposal to the Government. There were some negotiations but they pulled right out because they said that they could not, even with the promises of the banks, and the banks are tremendously interested in the development of the port and have been really wonderful and civic minded in the efforts they have made

Mr. DURHAM. These negotiations have been going on since 1954, have they not?

Mr. DILWORTH. Yes, sir.

Mr. DURHAM. As I recall, the same type of negotiations went on with Boston to try to get private enterprise to operate the piers, to go into business, and the same thing happened in Newark.

The three largest ports on the eastern shore are involved. If we had not done something, we would have found ourselves in the same position we found ourselves in in the Second World War, when we had to renovate every port on the eastern shore.

Mr. DILWORTH. That is right.

Mr. DURHAM. It is one way or the other.

Mr. BYRNE. Mr. Chairman, I do not want to delay the hearing any further, but everyone who wanted to be heard was invited to be here, either physically or to present his statement.

Mr. BRAY. The different people interested in this were advised and they perhaps all knew about this hearing, but they are not going to come out and say that they did not have proper notice.

Mr. DILWORTH. As I say, we have tried in every way possible to revive Philadelphia piers.

Mr. BRAY. And you levied taxes upon them?

Mr. DILWORTH. That is right and we were able to get the banks to form a pool to offer them a long-term, low-interest loan, but the figures were such that they found the Army Department would want them to pay a certain amount and they just could not do it.

Mr. BRAY. This is just a suggestion, but maybe an amendment to this bill would help to justify the difference in price when the Army

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said it was worth so much and then what you said you would pay; and, in the event of an emergency and in case the Army needs it, they could take it over.

That is just a suggestion. I do not offer such an amendment, but one thing I am interested in here is that we are going to have to do some explaining on this matter.

If we are not on sound ground, we will not be able to explain the difference between those prices-that is, the price we are selling it to you for and what the Army says it is worth.

Mr. DILWORTH. That is right.

Mr. BRAY. The Army has a clause in there to say that if they need it, they would take it anyway. That might justify the difference between this price and what you are paying, and what the Army says it is worth.

Mr. DILWORTH. Our intention

Mr. BRAY. That means you could place considerable value

Mr. DILWORTH. Our intention is, sir, that the Department of Defense would have the right and privilege to take it any time it wanted. If it has not been clearly enough expressed, we would be glad to amend the language to make it clear.

Mr. BRAY. It might make it more palatable.

Mr. DURHAM. Are there further questions?

Mr. DOYLE. I assume your statement that you would be willing to have language in here showing the Army could take over any time it wished-would that apply to peacetime?

Mr. DILWORTH. I do not think we could resist if we wanted to. Our whole plea is along that line; that it is something the Government should be interested in, even as a peacetime port development, and, in return for their giving us a hand, we should make it available to the Department of Defense any time the Department of Defense wants it. Mr. DOYLE. I assume, if the city had this turned over to it, that the city would want to lease all or part of the facilities to private parties for income purposes.

Mr. DILWORTH. That is our intention. We would like to have it privately operated, but our leases could provide that they were subject to the Defense Department moving in any time.

Mr. DOYLE. That broad provision you are approving would materially lessen the amount of income the city would get, would it not, from a private lessee?

Mr. DILWORTH. I do not think so, sir, because I think the average private lessee would not move in capriciously or arbitrarily. It might make a 5-or 10-percent difference, but that is something we could live with.

Mr. DOYLE. I asked those questions deliberately to bring out the attitude of the city.

Mr. DURHAM. Are there further questions?

Mr. KITCHIN. There has been a statement made by the mayor here that no group of private operators were either willing or able to pay this $7 million required. Does your survey reflect there is any private interest willing to pay some figure between your proposal and that of the Army?

Mr. DILWORTH. No, sir. I can say it authoritatively for this reason. The port development committee, made up of every business interested in the port, plus the city departments, has worked on this