The war has greatly stimulated manufacturing in the interior States. Many new industries have located on the banks of the Mississippi, Ohio, Illinois, and Missouri Rivers. An effort will be made to continue a substantial number of these industries during the postwar period. No greater encouragement could be offered than to make it possible for these new postwar industries to have access, at low transportation cost, to the high-grade coals of the Kentucky-Virginia area by the construction of the channels advocated for the Big Sandy River and its tributaries.

We believe that greater diffusion of our manufactures is of vital importance to the Nation as a whole. Whenever we make it possible to locate manufacturing plants close to raw materials we are reducing costs and increasing our economic opportunities.

Every sizable port on the Mississippi River system of inland waterways now has or is prepared to install ample facilities for handling all of the water-borne coal that may be required by their communities.

We earnestly urge your committee to approve the proposed improvement of the Big Sandy River and its tributaries. We believe, beyond all question of a doubt, it is fully justified economically.

At a hearing before the Board of Engineers for Rivers and Harbors on September 10, 1945, Mr. Macleay, president of the Mississippi Valley Association, made a brief statement in support of this project, which I ask permission to file with your committee.

STATEMENT OF LACHLAN MACLEAY, PRESIDENT, MISSISSIPPI VALLEY ASSOCIATION, ON THE BIG SANDY RIVER 9-FOOT CHANNEL PROJECT

When the United States entered the Second World War in December 1941, an impressive share of the new war plants and plant expansions were located in the midcontinent area. There were a number of important reasons for this concentration of new industry in the interior. First, this area was remote from the vulnerable seacoasts and protected against possible enemy attack. Second, the Mississippi Valley is in the center of most of the Nation's raw materials. Third, the midcontinent area is close to the centers of power fuelscoal, petroleum, and natural gas. Fourth, the Mississippi Valley is served by a diversified transportation system of rail lines, highways, and waterways.. Fifth, there was, and is, in the valley an ample supply of labor.

When the considerations which made the midcontinent area a vital part of democracy's arsenal during the war, obtain now to support the area's importance in the development of a sound and prosperous postwar economy. There is a direct relation between this fact and the economic value of the proposed improvement of the Big Sandy River.

It is in the interests of the national security as well as of a sound economy to develop in the Mississippi Valley a diversified metallurgical industry. This development is dependent upon the abundant and economic supply of three basic raw materials-iron ore, low sulfur high-grade coking coal, and highgrade limestone. These three constituents are responsible for the industrial growth of the Chicago, Birmingham, and Pittsburgh steel centers in this country, the Birmingham and Manchester centers in England, the Ruhr Valley in Germany, and the Donetz Basin in Russia.

The upper Mississippi Valley has abundant supplies of two of these vital raw materials-iron ore and limestone. It lacks high-grade coking coals and lowcost water transportation to make them available. The coals of west Kentucky, Indiana, and Illinois, which are close to the inland waterways, are all noncoking coals. The only supply of coking coal now readily available is produced in the southern high volatile and smokeless districts and moving to the valley either by an expensive all-rail haul or via the Great Lakes ports. The coking coals of western Pennsylvania and northern West Virginia are all substantially absorbed by the steel industries in the Pittsburgh districts.

Until low-cost transportation can be provided to move high-grade coking coals into the Mississippi Valley, its development of a diversified metallurgical industry is handcuffed by high rail rates. The improvement of the channels and harbors of the Great Lakes were undertaken primarily to provide low-cost water transportation of the high-grade iron ores from the Mesabi Range into the Pittsburgh district. The canalization of the Big Sandy River to provide an inland water link with the Mississippi system will make possible the development of the metallurgical industry in the upper Mississippi Valley.

In addition, the smokeless coals of the Pocahontas and Tug River districts with their superlative steaming and coking qualities are the only bituminous coals which satisfy the smoke ordinance specifications of many valley cities, such as St, Louis, Chicago, and Minneapolis. Low-cost transportation to move these coals into the valley is vitally important to these cities.

Thus there will be developed an economical two-way movement of coal on the river via the Big Sandy, the Ohio, and the Mississippi, and a compensating movement of other heavy tonnage to make a two-way haul.

It is logical to expect that with low transportation rates of high-grade coking coal that many cities in the upper valley will develop metallurgical industries. The Tri-Cities industrial area is a good example. The Tri-Cities are built on large deposits of high-grade limestone. They now consume large quantities of finished steel products manufactured in Chicago and Pittsburgh. With lowcost fuel available and reasonable joint rail-river rates on ore from the Cayuna field, there is the opportunity for the development of large blast furnaces in this area.

St. Louis is another logical meeting place for iron ore and the high-grade coking coals of the Big Sandy Valley. Such a union can be expected to stimulate metallurgical industries in this area.

The Mississippi Valley Association, representing industrial, commercial, and agricultural interests in 23 States, is convinced that the canalization of the Big Sandy River is economically sound and in the Nation's interests.

Mr. PETERSON of Georgia. Is that the complete presentation of the proponents?

Mr. HOBSON. That completes the presentation which the proponents desire to make, in chief, Mr. Chairman.

Mr. PETERSON of Georgia. Without objection, the committee will stand adjourned until 10 o'clock tomorrow morning, at which time the committee will meet and will proceed to hear the opponents.

(Whereupon, at 4:45 p. m., May 6, 1946, the committee adjourned, to reconvene at 10 a. m., Tuesday, May 7, 1946.)

BIG SANDY RIVER AND TUG AND LEVISA FORKS,

KY., W. VA., AND VA.

TUESDAY, MAY 7, 1946

HOUSE OF REPRESENTATIVES,

COMMITTEE ON RIVERS AND HARBORS,

Washington, D. C.

The committee met at 10 a. m., pursuant to adjournment, Hon. Hugh Peterson of Georgia presiding.

Mr. PETERSON of Georgia. The committee will come to order.
The committee is now ready to hear the opponents.

STATEMENT OF J. BROOKS LAWSON, OF WILLIAMSON, W. VA.

Mr. LAWSON. I am J. Brooks Lawson, of Williamson, W. Va., largest city on this proposed waterway, with a population of 10,000. I appear as president of the association opposed to the Big Sandy canal project.

Mr. PETERSON of Georgia. Where is Williamson? Will you point it out on the map?

Mr. LAWSON. Williamson is on the river here, the county seat of Williamson County. It is a voluntary group of professional and businessmen, railroad and mining employees, railroads, coal associations, individual coal operators.

Mr. PETERSON of Georgia. Mr. Lawson, before you begin your statement, I believe there are possibly several Members of Congress present who might wish to make some statement.

Mr. LAWSON. Mr. Chairman, I appreciate it if you would call on them now, and there will be others coming in, and will you kindly interrupt me at any time. We want to hear them:

Mr. PETERSON of Georgia. Is any Member of Congress present who wishes to be heard at this time? I know there are several who have expressed a desire to be heard and who are in opposition and who will be heard later. If there is no one present, you may continue, Mr. Lawson.

Mr. LAWSON. I suppose that I had better start over again.

I appear as president of the association opposed to the Big Sandy canal project, a voluntary group of business and professional men, railroad and mining employees, railroads, coal associations, individual coal operators, farmers, public officials, and other citizens of the States of West Virginia, Virginia, and Kentucky.

We firmly believe that to canalize the Big Sandy for 27 miles, its Tug Fork for 60 miles, its Levisa Fork for 100 miles, involves a needless expenditure of public funds. Estimate of construction cost

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has been increased by the Board of Engineers from $68,000,000 to $82,300,000 with an interest cost during construction of $4,940,000.

The Board of Engineers has also revised the district engineer's estimate of expected annual tonnage of 15,000,000 tons of coal to 8,300,000 tons of coal. We expect to show that this latter estimate is an overestimation and is far in excess of any amount that will be transported. It should not be overlooked that whatever the actual cost of construction or whatever the actual tonnage, there will be a continuing annual charge of $4,190,000 or more.

Mr. PETERSON of Georgia. Did I understand you to say that the engineers have revised their figures from 15,000,000 tons to 8,000,000 tons?

Mr. LAWSON. Downward to 8,300,000 tons.

Mr. PETERSON of Georgia. Were you there when the Army engineers did that?

Mr. LAWSON. I have read their report.

Mr. PETERSON of Georgia. Have you talked to them about it?

Mr. LAWSON. I have not talked with them, but I have read the report of the Board of Army Engineers.

Mr. PETERSON of Georgia. You do not know how they arrived at the downward revision?

Mr. LAWSON. No: I do not.

Mr. PETERSON of Georgia. Was that the district engineer that made that one report of 15,000,000 and then later revised the figures to 8,000,000?

Mr. LAWSON. No, Mr. Congressman, the district engineer originally estimated 15,000,000 tons of coal, and that was last June 1945. Mr. PETERSON of Georgia. Did they revise those figures?

Mr. LAWSON. In the Board's report of December 1945, the figure appears as 8,300,000 tons. However, we have other witnesses here who will discuss that phase of the problem.

Mr. PETERSON of Georgia. Now, in looking over this letter the committee has here I believe you have a copy of it; it has been placed in the record, or will be-from the Board of Engineers, I gather that the district engineer estimated a saving of 8 or 9 cents per ton for the 15,000,000 tons, but the Board seems to have set the figure that the savings would be on 8,300,000 tons. Is that the picture now?

Mr. LAWSON. As I understand it, the district engineer estimated a savings of 29 cents per ton on 15,000,000 tons of coal, whereas the Board of Engineers estimate 8,300,000 tons of coal with a saving of 80 cents per ton.

Mr. PETERSON of Georgia. There is quite a difference between the district engineer first basing his report on 15,000,000 and then later revising his figures down to 8,000,000. There is quite a difference in that, and in the district engineer submitting his figures on 15,000,000 and the Board making a somewhat different report on the savings on 8,000,000 tons.

I just wanted to get it clear as to whether you were attempting to make it appear that there have been two reports from the district engineer or what.

Mr. LAWSON. The only freight possible in any appreciable quantity for the canal is coal, and it should forcibly impress this committee that a vast majority of the coal operators who would be the chief beneficiaries are opposed to it and have so gone on record.