the large volumes of coal necessary to be transported over it in order to justify it economically. Evidence will be offered as to the difficulties created by the lack of water in these streams. Sufficient water for navigation during all or part of 8 months of the year can be obtained only by pumping water upstream from lower to higher pools, starting by pumping water out of the Ohio River. If it were not possible to take water from the Ohio, this novel proposition of the Army engineers could not have even reached the blueprint stage. Mr. COLE. How many months of the year would that be necessary? Mr. LAWSON. All or part of 8 months, depending on the amount of rainfall. On the basis of the Army engineers' own figures, at least from 7 to 10 billion gallons of water a day will have to be pumped from lower to higher pools, depending upon the number of lockages. This would be enough water to furnish every person in the city of New York, Chicago, and Boston 100 gallons of water a day. It sounds like another Passamaquoddy project. We in the Big Sandy project are very much afraid that the Army engineers are going to wear the water out pumping that back and forth. We are also concerned that the project may produce serious pollution and health problems. We were told yesterday by the proponents that the Big Sandy Valley needs the canal in order to compete with other coal fields which are accessible to water-borne transportation; that because of the lack of such transportation the valley suffers more than the country in general in normal times-the history of coal production and mining employment in this area, however, for the past 25 years as compared with the United States as a whole and with competitive coal fields shows that coal production and employment in the Big Sandy Valley has maintained a higher average during that period than the other areas just mentioned. Finally, it should be observed that the alleged benefits which may flow from the construction of this canal would be essentially private rather than public in character. Any savings in freight rates which might accrue would benefit only a few large mining companies and their consignees. Coal is usually sold on the basis of rail rate to destination, and there is but little evidence that the ultimate consumer gets the advantage of the water rate or that industry reduces the price of its product because it gets fuel cheaper. But, the proponents argue, why are the railroads complaining if we are correct in saying that no large amount of coal will move over the canal? If that be true, the canal will be an economic failure and $87,000,000 of taxpayers' money will have been wasted. On the other hand, if coal traffic in quantities claimed by proponents is hauled, this will divert business from the railroads and produce economic consequences in the form of established coal markets and loss of taxes which far overshadow any benefits that could ever be realized from the canal. Since coal consumption prior to the war was declining, due largely to expanded use of competitive fuels and water-generated electricity, it is improbable that its consumption will materially increase in peacetime years. Hence, any transportation of coal by the canal means diversion of traffic from the railroads and any increase in shipments from the Big Sandy Valley because of the canal means loss of markets for mines not adjacent thereto. Therefore, if the canal helps the Big Sandy area-and we do not believe it will-it will hurt other coal-producing areas. Public funds should not be used for that purpose. Mr. RANKIN. Why would it hurt other coal-producing areas? Mr. LAWSON. Would you mind if Mr. Saunders answers that ques tion? Mr. RANKIN. You made the statement; I thought maybe you had something in mind. You say this is a freight-rate fight. What is the difference between the rates the railroads are charging for hauling coal out of this area, and the rate they charge along the river where they have water competition? Mr. LAWSON. What river do you have in mind, Mr. Rankin? Mr. LAWSON. They are competitive or practically so. Mr. RANKIN. So you have cheaper freight rates than you have for this area? Mr. LAWSON. I do not think so, considering all of the facts involved. Mr. RANKIN. I am talking about the rates now. My understanding is that where you have water competition, your rates are cheaper than they are in the area like this where you do not have competition. Mr. LAWSON. Of course all of these rates are fixed by the Interstate Commerce Commission. Mr. RANKIN. I understand, but I am not hiding behind the Interstate Commerce Commission. We represent the Congress of the United States here, and our people have been punished enough by the Interstate Commerce Commission, we folks who pay the freight. But now this is a matter that is laid in the lap of Congress, and if the railroads charge a higher freight rate for hauling this coal out of that area for the same distance than they do for those areas where they have water competition, I want to know what the difference amounts to. Mr. LAWTON. It is my understanding that they do not charge a higher rate. Mr. RANKIN. Why do you say this is a freight-rate fight then? You said this was a freight-rate fight. Mr. LAWSON. I made the statement for the reason that two or three of our large, wealthy coal operators have been trying to get what they call a river rate down the N. & W. system to Kanawha. Mr. RANKIN. In other words, if they had the same freight rates. from this area that you have from other areas where you have water transportation, there would be no demand for this project? Mr. LAWSON. I do not think that that necessarily follows at all, because on the Levisa Fork they have a river rate of 55 cents but no coal operator has ever used that rate despite the fact it has been in force more than 10 years. Mr. RANKIN. That is probably what would happen here. Mr. LAWSON. But not at 55 cents a ton. Mr. RANKIN. They brought their rates down to meet the competition on that stream, did they not? Mr. LAWSON. No, Mr. Congressman. Mr. RANKIN. And they have not done that here and if you depend on the Interstate Commerce Commission to give these people relief, they will not get it and the rate will go on for a couple of hundred years, speaking advisedly, because I am one of the victims of the discriminations in freight rates. I can see now from the argument that we have heard from both sides, that if these people had the same freight rates on their coal and the same service they have in other areas, this fight probably would not be before the Congress. Mr. LAWSON. The Norfolk & Western has offered the river rate if the coal companies would establish and construct terminals at Kenova where they could unload the coal into the Ohio River, but they have not offered to do so. Mr. COLE. While we are discussing rates, would that be included in the establishing of the water rates? Mr. LAWSON. I think not. Mr. COLE. The Government would be subsidizing the rates through making the facilities possible to transport this coal? Mr. LAWSON. That is right; doing the pumping and paying therefore and taking care of the canal. Mr. PETERSON of Georgia. Wait I would like to get that straight. That is included certainly in the cost of this project or in the maintenance of the project, is it not? Colonel FERINGA. As I stated yesterday, we have included in our estimate the total cost for providing the pumps, and also in our annual cost we have included the cost of amortization, the maintenance, the operation of those pumps, and that is included in our estimates, as always on one side we include all costs and the other side we include the benefits. As I stated also yesterday, we do not believe that the pumps will be necessary for a great percentage of the time. We have taken the outside cost like we always do before this committee, and included that outside cost within our estimate. I did not want to interrupt you. Mr. LAWSON. This is simply an enrichment of that region at the expense of impoverishing of other coal areas. That explains the telegrams that we have received from areas not immediately located on the canal. It all boils down to a case of robbing Peter to pay Paul. Testimony was also presented before the committee yesterday that the Big Sandy field is the only important coal-producing area in the United States which does not have water transportation. That is not true. The adjoining Hazard and Harland fields in Kentucky do not have water transportation. The great coal fields in southwestern Virginia have no water transportation, and there are vast areas of coal lands in the States of Ohio, and Indiana, western Kentucky, central and northern West Virginia, and central Pennsylvania which have no water transportation, and finally the great bulk of the Big Sandy areas itself would be unable to economically use this canal. In closing, may I say this Nation is dangerously in debt? In the valley we are in dire need of thousands of homes. We are in need of hundreds of buildings and structures for business purposes. We are in need of improved highways and new highways, but the canal is a luxury we do not need and cannot afford. It is the sober, considered judgment of the substantial citizenry of the area affected that the doubtful benefits of the canal bestowed by the Federal Treasury in the guise of Santa Claus as the Big Sandy Valley Association puts it, are not commensurate with the cost. Certainly, it must seem strange to you that we are here fighting this utterly fantastic and vainly conceived project. However, we owe it to ourselves, our children and the Nation as a whole to set an example of economy and prudence. Mr. RANKIN. You spoke a moment ago about throwing railroad men out of work. If you would reduce those rates commensurately with the rates charged in other coal fields, not only would that not put the railroad men out of work but you would put more of them to work. Mr. LAWSON. Our rates are competitive with other coal fields. Mr. RANKIN. No, they are not competitive there because of the fact that you have no competition. The rates are higher from that area than they are from other coal fields. Mr. LAWSON. I understand, Mr. Congressman, that Congressman Bailey, of West Virginia, has come in. Mr. PITTENGER. What town did you say you lived in? Mr. LAWSON. Williamson, W. Va. Mr. PITTENGER. What was your occupation? Mr. LAWSON. I practice law. Mr. PITTENGER. You are a lawyer? Mr. LAWSON. Yes, sir. Mr. PITTENGER. How long have you lived there? Mr. LAWSON. I have lived there going on 18 years. Mr. PITTENGER. You were born there? Mr. LAWSON. No; I am older than 18. I was born in West Virginia. Mr. RANKIN. Whom do you represent here? I was not here when you came in. Mr. LAWSON. I appear here in behalf of the associations opposed to the Big Sandy canal project. Mr. RANKIN. You are an attorney for the railroads? Mr. LAWSON. I am not; I have never been retained by any railroad at any time and I am not now. I want to drop a word of comment about the representation in Congress here. As stated by Congressman Bailey, Congressman Ellis appeared before the Board of Engineers and will appear here today, if possible, in opposition. I should like, also, to say that both our United States Senators have expressed opposition to this proposed canal. Mr. PETERSON of Georgia. I would like to say that the committee appreciates having the views of the members of the delegation from West Virginia, and we asure you that you have a very able delegation in the House who are alert to the wishes and needs of the great people of West Virginia, and they are doing a splendid job here for you. Mr. LAWSON. I certainly thank you very much. Mr. PETERSON of Georgia. I believe that we have with us Congressman Daughton, from Virginia. Mr. RANKIN. Representative Robertson of Virginia was here yesterday. STATEMENT OF HON. RALPH H. DAUGHTON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF VIRGINIA Mr. DAUGHTON. I do not represent the railroads and I never did represent them, but the Norfolk & Western dumps millions and millions of tons of coal per annum through my port there of which some goes abroad and the other is scattered throughout the United States. You may say that I am here for selfish reasons. The Norfolk & Western Railroad is the largest taxpayer that the State of Virginia has, and I can say to you gentlemen without fear of contradiction. that the Norfolk & Western Railroad pioneered that area. Had it not been for the money of the stockholders of the Norfolk & Western Railroad and I guess also the C. & O., there would not have been any coal fields developed up there. Now suppose the rates are a little bit high coming out of there. I just want to say to you gentlemen in closing, this: Is it up to the taxpayers of the country to furnish opposition to those fields and that railroad up there? I submit if it is a good proposition, let some private industry go in there and develop other means of transportation in opposition to the Norfolk & Western, and the C. & O. If the gentlemen please, it is no time, I submit, for that kind of an expenditure of public money. I would hope, Mr. Chairman, you would permit me to file a statement to go along with what I have had to say. Mr. PETERSON of Georgia. Surely. (Statement of Congressman Daughton not given to reporter.) STATEMENT OF HON. CLEVELAND M. BAILEY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WEST VIRGINIA Mr. BAILEY. Mr. Chairman and gentlemen of the committee, for the purpose of the record, I am Congressman Cleveland M. Bailey, of West Virginia. I appear for myself and on behalf of certain of my colleagues in West Virginia in opposition to the proposal. Mr. Chairman, at this time I desire to read into the record a joint signed statement: To the Chairman and Members of the House of Representatives' Committee on Rivers and Harbors: GENTLEMEN: We, the undersigned members of the West Virginia delegation in the House of Representatives, with leave of your committee, file the following statement for the record of your hearing on the project for the canalization of the Big Sandy River, Levisa Fork, and Tug Fork, in the States of Kentucky and West Virginia : 1. We feel it would be wasteful of the time of your committee to present an argumentative statement which, of necessity, must be but a repetition of what has been, and will be, fully covered by both oral and written evidence at this hearing. 2. We are familiar with the section of West Virginia to be affected by the project above mentioned and are familiar with the people, their industries, and their interests in that section. We are likewise familiar with the evidence and |