it is this coal or much of it that is not being mined but is available. That is the coal we are considering.

Mr. DONDERO. Are they anxious to mine that coal?
Colonel FERINGA. The operators are represented here.

Mr. DONDERO. Have you an estimate of the coal that would move, but is not moving, in comparison with that which is moving?

Mr. PETERSON of Georgia. In arriving at the potential benefits of this project, did that element play a major part? In other words, I refer to the coal not being mined and not moving out because they cannot get it out.

Colonel FERINGA. Yes; that formed a part of the Board's consideration.

Mr. LINK. You say that by the development of this project a market would be opened to the westerly section of the country.

Colonel FERINGA. Middle West.

Mr. LINK. Would that coal go to the Middle West at the expense of the eastern seaboard?

Colonel FERINGA. No. We find there is ample coal moving to the East, Northeast, and the West, but not the Middle West. Coal is not moving to the Middle West in as large quantities as wanted there, on account of the cost.

Mr. LINK. Did you make a statement that the eastern coal market is saturated?

Colonel FERINGA. No.

Mr. PITTENGER. We cannot get any coal up North.

Colonel FERINGA. There is coal for the eastern market and the Middle West. The coal moves to the eastern market normally to the amount that the railroads can supply it and the eastern consumers want to buy it. There is still mine capacity, the coal is there and the ability of the local miners to produce in excess of the amount that normally moves out of that area exists.

Mr. RANKIN. I should like to have the B. t. u. content of this coal in question.

Colonel FERINGA. It is 14,000.

After careful consideration of the data presented, the Board concludes that an ample supply of coal is available and sufficient demand for the product at existing inland waterway ports to insure the movement of at least 8,300,000 tons per year via the waterway and its connections with resulting savings of about 80 cents per ton, or $6,700,000 annually. That is less than the district engineer estimated. We disagreed with him as to the certainty that the consumers will use that much coal. The Board feels certain that the consumers will use 8,300,000 tons of coal a year.

The Board finds the major portion of this prospective tonnage to lie on the sides of the forks more accessible to water than to the existing railroads and its movement by barge would consequently enjoy a favorable loading differential without substantially reducing present railroad coal traffic. The Board concurs in the general plan of improvement recommended by the reporting officers and is satisfied that facilities can be provided, at reasonable cost, adequate for the contemplated operation of barges and towboats. The Board believes, however, that the cost of construction will be somewhat greater than estimated by the district engineer, due in part to the nature of the foundations for structures, and that the present uncertainty as to

future prices of labor and materials warrants a more liberal allowance for contingencies. Furthermore, it is of the opinion that additional small lock chambers should be provided at the lock sites on the main Big Sandy River, where traffic will be more subject to possible congestior. Allowing for these additional elements, the Board estimates the construction cost of the improvements at $82,300,000.

The Chief of Engineers concurs in the recommendation of the Board.

The improvement is recommended subject to the conditions that local interests agree to establish, operate, and maintain adequate terminal and transfer facilities, and that they maintain all parts of railroads, highways, bridges, and utilities which would be altered or constructed as a part of the improvement.

Referring to costs and annual charges, the cost to the United States for new work would be $82,300,000; maintenance and operation of all works, $603,710; interest and amortization, $3,586,290; total annual carrying charges, $4,190,000.

Mr. DONDERO. What year did you take as a basis of cost?

Colonel FERINGA. 1945. They are current costs. This report was made by the Board in December 1945. We try to get as current costs as possible. We include a higher item for contingencies because things were uncertain.

General Wheeler made the statement that we are getting good prices on our big jobs. I have found that dirt-moving costs have not gone up much; concrete work has not gone up materially. Engineering News-Record indicates that since 1941, 245 costs have gone up 20 percent or from 38 to 45. I think we are getting fair prices. We jacked up the estimates to be on the safe side.

Mr. RANKIN. The end of the war finds us with more machinery to do construction work, does it not?

Colonel FERINGA. Yes. We do all this work by contract, if possible. If the bid is less than 25 percent more than the estimate, we may award a contract on it; but if it is more than 25 percent over the estimate we cannot. We have terms in some contracts whereby if any equipment is available we can sell it to a contractor, but that provision is tied up with so many qualifications that it is not very effective.

Mr. RANKIN. The contractors can use this surplus material if they want to; it can be transferred to them and they can use it.

Colonel FERINGA. Yes.

Mr. RANKIN. That would be better than to let it rust away.

Mr. BARDEN. You could not tell us how we could find and make available some of this construction material, could you?

Colonel FERINGA. No; I wish I could.

Mr. BARDEN. I can get advice in regard to it from everybody except those in charge of it.

Mr. RANKIN. The machinery you are talking about consists of automobiles, and so forth.

Mr. BARDEN. No; I refer to dirt-moving machinery, and so forth. Mr. RANKIN. The big dirt-moving machines are not much in demand, because they can be used only by big contractors and those engaged in this kind of work.

Colonel FERINGA. I have so often tried to get a ray of light. The other day a former able Army officer told me that he did get two draglines, but it took him a long time.

Mr. BARDEN. I think we ought to give him a medal.
Colonel FERINGA. I felt that he deserved it.

Mr. PITTENGER. This proposed project is all in Kentucky, is it not? Colonel FERINGA. The Levisa Fork is completely the part under consideration is completely within Kentucky. The Tug Forks lies between West Virginia and Kentucky, and both States claim it. I have heard it said, again, that it is between the two States. Big Sandy lies between West Virginia and Kentucky.

Mr. FITTENGER. I want to compliment these folks on their desire to open up new avenues and corridors of commerce for the benefit of some folks not so fortunate as they are. I take it that the proponents of this proposed project believe the development of this water transportation will not only hurt existing transportation facilities but will improve the commercial possibilities and the ability to expeditiously handle freight. It seems to me that they are really making an argument for the St. Lawrence waterway. I am wondering how some of the boys who periodically sent to Members of Congress letters and propaganda in opposition to the proposed St. Lawrence waterway can be so strong for this waterway and so shortsighted in connection with the St. Lawrence.

Colonel FERINGA. I testified before the Senate committee on the St. Lawrence and said it certainly had great merit.

Mr. DONDERO. Is there any chance of having this project in operation 12 months a year?

Colonel FERINGA. Yes; the full 12 months.

Mr. DONDERO. Is there any doubt about that?

Colonel FERINGA. No. We are doing that same kind of work on the Ohio throughout the whole year. There are periods when, on account of high water, one cannot move. We have allowed about 65 days of time during a year when probably navigation would not be able to operate.

Mr. DONDERO. Would this saving in freight be passed on to the consumer? Is it not a fact that coal, whether moved by rail or water and is sold at a price based upon the rail rate?

Colonel FERINGA. I believe that is right. I have one of the Board's economists here and that is his understanding.

Mr. DONDERO. As a matter of fact this saving would inure to the advantage of the distributor or dealer, would it not?

Colonel FERINGA. The cost of moving coal would be less by water than by rail.

Mr. DONDERO. I agree; but the point I am trying to make is that it is the custom in the coal business that coal is sold at place of destination on the basis of the freight rate-the rail rate. I may be wrong about that, but that is my understanding.

Colonel FERINGA. There is presently no coal moving from the Big Sandy to this general area by rail. We know that competition of water transportation has been so keen, and I hope it will remain so, that the benefits do go to the consumer. There are many pages of testimony on that in the last Senate river and harbor bill hearing in connection with the Missouri River project. There was offered before that committee page after page of testimony which had been documented showing that the benefits go to the consumer-that the benefits of reduced cost of transportation do accrue to the consumer. A witness gave an example of transporting wheat. A farmer within the

area served by water transportation got 3 cents more for a bushel of wheat than one who did not live in that area.

In our report we have figured the saving. Wo do not try to determine to whom that saving will accrue. If the saving is there, we feel that we have lived up to the desires of the committee as to whether a project is economical.

If a river and harbor improvement gives benefits only to one interest, we always require a large measure of local contrbution to costs; where we find that the benefits are Nation-wide, we recommend it favorably.

The recommended improvement will open up to low-cost water transportation one of the country's largest fields of high-volatile coal. In the general area there are also extensive beds of low-volatile coal. The Board has carefully reviewed the reporting officers' estimates of tonnage that will use the waterway and the prospective savings. It has also given full consideration to the estimates of the proponents and opponents.

The Board estimates the prospective coal commerce at 8,300,000 tons annually and the prospective annual savings in transportation charges, source to destination, at $6,700,000. When compared with the Board's estimate of the annual cost of the waterway, this shows a favorable ratio of costs to benefits of 1.0 to 1.6.

We sent this report to the three Governors of States concerned. The Governor of Kentucky stated he was in favor of the project; the Governor of Virginia, whose State lies south of the project, but to whom we sent the report because of the discussion of possible reservoirs up at the headwater, stated he was not in favor of it.

Mr. DONDERO. What about the Governor of West Virginia? Mr. BARDEN. The Governor of Virginia said: "I therefore recommend against the project.'

The Governor of West Virginia said in his last sentence:

I am constrained for the reasons mentioned to express my doubts as to the wisdom of this project, and believe it my duty to recommend against the same. Mr. RANKIN. Who was the Governor of Virginia?

Colonel FERINGA. Mr. Tuck.

Mr. RANKIN. Was that before they had the strike of public utilities employees?

Colonel FERINGA. I think he is still Governor of Virginia. None of this proposed project is in Virginia, but we considered in the report flood control reservoirs that would be at the headwaters and therefore we must, by law, and properly did, send a copy of the report to the Governor of Virginia.

Mr. ANGELL. Does any Virginia coal move by water?
Colonel FERINGA. No. Not by inland waterway.

Mr. ANGELL. It would not be any benefit to Virginia?
Colonel FERINGA. It could not be.

Colonel Pockras has the figures as to the tonnage that would be. affected.

Mr. PETERSON of Georgia. We shall be glad to have them.

Mr. BARDEN. You have not asked John L. Lewis whether he is going to let you move any coal over that proposed waterway, have you? But that is a $64 question.

Colonel FERINGA. It is a $64 question, and I cannot hit the jackpot on it.

Colonel POCKRAS. On Tug Fork we estimate available by way of reserves within a 10-mile range of the waterway 938,741,000 tons. There is an average annual mine production in that area of 7,840,000.

On Levisa Fork we estimate reserves within 10 miles of the waterway of 1,368,420,000 tons, and in that area there is an average annual mine production of 2,692,000 tons, or a total for both Forks available of reserves within 10 miles of the waterway of 2,307,164,000 tons, and the average annual mine production at present is 10,538,000 tons. Mr. DONDERO. Does the Tug Fork go between West Virginia and Kentucky?

Colonel POCKRAS. It is the dividing line.

Mr. PETERSON of Georgia. Have you the figures as to the amount of coal available and not being mined, but which would be mined, on account of lack of transportation facilities?

Colonel POCKRAS. That would be difficult to answer at present. These figures give an idea of the amount of coal being moved out. Colonel FERINGA. Seven million tons are being mined on Tug Fork and 3,000,000 tons are being mined on Levisa Fork. Inasmuch as there is no water transportation, that tonnage must move by rail. We know there is demand for 8,300,000 tons annually by consumers on the inland waterways. We believe that 8,300,000 tons would move in addition to that now moving. Add the two and we have 10,000,000 tons, and 8,300,000 more would move. Therefore it would increase production in that part of the country about 100 percent.

Mr. PETERSON of Georgia. You calculate that with this proposed project in operation there would be 20,000,000 tons of coal produced. Colonel FERINGA. Yes; about that.

Mr. BARDEN. In view of the fact that price has not been the object, and there is and will be a market for all coal mined, how do you calculate that the increase would be so great as you indicate?

Colonel FERINGA. I think price is the object. I think there will be mineowners here who will be able to tell you that they have walked out on their markets because they could not state definitely that they could supply the coal that is available. They cannot supply the demand today because they do not have access to low-cost transportation facilities.

Mr. DONDERO. Have you at any time considered the amount of power that will be produced in the United States by water, offsetting the market for coal?

Colonel FERINGA. At any time we recommend a multipurpose project we always assure this committee that there will be a market available.

I think there is such a demand for electric power that if coal is not made readily available to the consuming public the coal market will decrease. That, to my mind, is perfectly obvious. If we cannot get coal, we shall have to turn to something else.

Mr. DONDERO. Would not the electric power displace the necessity for mining coal?

Colonel FERINGA. I do not think this high-grade coal would be used generally for the generation of steam. This is high-grade coal needed badly for certain purposes. We state that markets to the extent of 8,300,000 tons annually are assured, and the major part of that coal will not be used for the production of power.