I do not recall the name of that stream at the left, but it is shown where you have water and rail transportation both, your rates were 62 cents, whereas on the other extreme it was 87 cents. There is a difference of 25 cents, so that the great value that this would be to you in addition to giving you water transportation, it would give you the benefit of water transportation rates on your railroad.

Mr. WELLS. That is correct. The situation is this: We do not expect to ship all of the coal that we mine in the Big Sandy Valley by water. We would not have to do it, but there is a vast storage of coal as was explained here by the engineers' report this morning, which lies in spots that are inaccessible to the railroad and yet accessible to the river, that can be exploited. There are thousands of acres of this high-quality coal that is lying there and has been there for years and has never been tapped, and there is only one reason why it has not been tapped, and that is the problem of transferring that coal from the opposite side of the river over to the other side where the railroad is located.

Mr. RANKIN. Let me give you the most striking example in the United States. Birmingham, Ala. was suffering the same punishment that you are now on the freight rate proposition until they provided for those barges on the Warrior River, up to Birmingham. That is really 40 miles from the city, the port is. But, by making the connection with the city of Birmingham, they provided water transportation to the city of Birmingham.

The railroads immediately got permission from the Interstate Commerce Commission to bring their rates down to meet that water competition and instead of injuring the railroads, there is more freight being hauled into Birmingham by rail than ever before.

Mr. WELLS. We had a meeting in January a year ago in Iceland, Ky., and at that time the railroad companies had no idea that we really meant business in getting this proposition through and were not too worried about it, and we were meeting with the Big Sandy Coal Operators Association, that will appear here against it, and at that time there was no reason to take any action because they didn't think they were going to be able to do anything about it, but at that time the railroad companies' representative there was asked this question: In the improvement of the Kanawha Valley, was there any drop in the shipping of coal by railroads. In other words, we asked him if it hurt the railroad company to lock and dam the Kanawha Valley and he said "No", and he was asked if there had ever been any time when the improvement of a river hurt a railroad, and he said "No". He was asked if he did not ship more ammonia at $11 a ton from the Kanawha Valley than they had shipped coal at $2 a ton before the war, and he agreed that that was the case.

Now, gentlemen, we are not interested only in the basis of our little locality up there. We are definitely interested because of that reason, but we are very much interested in seeing that these people in the upper Mississippi and the lower Mississippi and anybody else that needs our coal gets it, and the only way they can get it is for us to provide some means and for the Government to lock and dam this Big Sandy River in order to get this coal to them at a rate that they can pay.

Mr. DONDERO. I am interested in that last statement. I want you to look at the map and look at the State of Michigan, where we use

practically all of the coal that comes from your area. It is not a question of 55 or 62 cents a ton, it is a question of whether we can get it at all. We have been rationed a long time and cannot even buy coal.

Mr. WELLS. That is true now and that was true during the war, but just the time this coal emergency is over, you fellows are going to shop around and you are going to say, "Well, here I can buy this coal for so much a ton. I understand that you pay quite a price for coal up in your area, even in normal times, as compared with the price of coal down at the mine."

Mr. DONDERO. From what I have heard here today, we will not shop around at all, we will just shop with you.

Mr. WELLS. I hope that I have been successful to that extent. Mr. RANKIN. The cost is just as much to ship sorry coal as it is for good coal.

Mr. WELLS. If shipped by the same means of transportation, sir. Mr. RANKIN. Now, there are some areas that you pointed to there that, I will not say which one, but some that I know that coal will not run over eight or ten thousand B. t. u.'s to the pound, and this coal here, as someone said a moment ago, was 14,000, and that is the highest grade of coal that we have.

Mr. WELLS. Aside from the B. t. u. content of this coal, we must look at it from this standpoint, also, that this is a special type of coal. Mr. Dondero probably has in mind the coal that goes in his stoker in his home.

Mr. DONDERO. My stoker happens to be a shovel.

Mr. WELLS. But this coal that we want to make available to these markets, and of course, we have that eastern Kentucky, Millers Creek coal up there that you like so well and we like to send you so well, but this industrial coal that we have, this metallurgical coal, it is not only, high as far as the B. t. u. content is concerned, but it is low in sulfur, it is terribly low in sulfur, and the one problem that the metallurgical industry has in the use of coal is the presence of sulfur in coal.

Mr. RANKIN. Let me ask you, getting back to the connection between you and Mr. Dondero, if this waterway is provided, can this coal be shipped to your town by barge?

Mr. DONDERO. If you look at the map, that could not come by barge, it has got to come by rail. There is no other way except you shipped it up to Ashtabula, Ohio, and then by lake freighter.

Mr. RANKIN. You could ship it into Chicago by barge; how far is that?

Mr. DONDERO. That is 300 miles from us.

Mr. RANKIN. They can ship it up the Mississippi or the Illinois. Mr. DONDERO. It cannot come all by water.

Mr. WELLS. It can come by a combination.

Mr. RANKIN. I was asking you'how close it could get to you by barge.

Mr. DONDERO. Not less than 300 miles.

Mr. JACKSON. I take it that this area is treated as somewhat of a marginal operation, it is difficult for you to compete under normal conditions, is that the point, because of the transportation cost?

Mr. WELLS. You speak of normal conditions. You mean under normal economic periods in the United States?

Mr. JACKSON. That is right. The abnormal demand for coal during the war years has been so great that cost has not been a controlling factor.

Mr. WELLS. It has not been a controlling factor, no, during these war years when we had directives from the Solid Fuels Administration to ship this coal wherever they wanted it shipped, it was not a matter of cost. But, this matter of cost has entered into this situation even during the war, because I know from experience, having been in the coal business myself during the war, there were certain parts of the United States which had local ceilings on coal, that could not receive this coal and resell it because of those ceilings, and because of that freight rate.

Mr. JACKSON. I take it that it is difficult for the operators in your area to compete because of this extra transportation cost, is that the point?

Mr. WELLS. I think that that is right.

Mr. JACKSON. Is that the determining factor in the competitive market?

Mr. WELLS. That is right.

Mr. HUGH PETERSON. The other important factor, as I understand it, is that you do not have any transportation facilities for a larger area that would otherwise be producing?

Mr. WELLS. That is true enough.

Mr. DONDERO. If this project were constructed, could you get along without those parallel railroads now?

Mr. WELLS. Do not misunderstand me, I am not minimizing the great work that the railroads have done; the railroads have carried our coal out of that valley for years, and we appreciate the fact that they are there, and we are not anxious in any way to get rid of those railroads. Do not misunderstand me.

Mr. DONDERO. Would it make the railroads unnecessary, that is what I wanted to know.

Mr. WELLS. Absolutely not.

Mr. RANKIN. It would not injure the railroads in any way or diminish their transportation?

Mr. WELLS. In my opinion, and in the opinion of the representatives of the railroads at that meeting in January a year ago, it definitely would not. There is enough coal in the Big Sandy Valley to give the railroads what they are getting, and all they are able to take care of, except in this particular period when they are not producing coal in the Big Sandy River area, but in normal times, that would be so. Then this added amount that would be available for the metallurgical industry that is springing up in the Middle West would be for river transportation. Gentlemen, just to go a little beyond what I am supposed to tell you here today, coal is not the only natural resource that we have in eastern Kentucky, but it is the major one. We have ceramic clays, and we have an abundance of natural gas and our natural gas is being sent to Baltimore and Washington. We also have deposits of iron ore, and we have salt brines. In other words, we have every natural resource and a greater abundance of those natural resources than the great Kanawha Valley. We have the basis in the Big Sandy River, we have the fundamental elements required for the greatest chemical industry in the world, and an inexhaustible supply.

But we cannot get industry in Big Sandy Valley because we have poor transportation. I know from experience, because I have served on these chamber of commerce organizations to try to influence industry into that valley and the one problem we run up against is the transportation costs in and out of the valley.

To continue, as I said, the Big Sandy Valley was designated as problem No. 1 by the Federal Emergency Relief Administration, and listen to this, gentlemen. In a report published by this Administration, which is a matter of public record, it is stated that the number of people on relief in the Big Sandy Valley was two and a half times that of the next highest relief case load area in the United States. In other words, it was stated too that in the five counties on the Levisa Fork, with a population of 213,000 people, there were 66,000 persons receiving contributions for their existence from the United States Government..

Mr. DONDERO. Is that due to the fact that it is not a diversified section and mainly depends upon the coal industry?

Mr. WELLS. That is correct.

Mr. DONDERO. We had a very similar experience in Detroit, where the great automotive industry is located.

Mr. WELLS. We were two and a half times the next highest, sir. Mr. JACKSON. I think that you will find the highest in my area, out in the lumber industry.

Mr. RANKIN. What year was that?

Mr. WELLS. In the 4 years between 1932 and 1940.

The Corps of Army Engineers conducted this survey and found that there were 2,349,212,000 tons of coal lying within 10 miles of the river, and which will furnish an annual shipment of more than 7%1⁄2 million tons on the Big Sandy River for over 300 years, six times the period required to justify this project.

Now, when people in the Big Sandy Valley realize that it is necessary for us to either provide our own essentials or to have something to trade for them. Now, we are not asking to elevate our coal fields into a position of advantage over other competing coal fields; the only thing we are asking, gentlemen, is that we be given an equal opportunity to compete with these other coal fields in normal times. We will take care of the costs of producing coal at the mine in order to compete with them, but we do want this improvement of the river in order that we can compete with those fellows.

Mr. PITTENGER. How many people are in this area now?
Mr. WELLS. Approximately 530,000 people; sir.

Mr. PITTENGER. You folks may have been hard-up during those years, but I think every other section of the country was hard-up, too, and the reason we did not use your coal was that we did not have money enough to buy it.

Mr. WELLS. The only way we have of determining whether or not that is correct is to examine the operations of the other coal fields that enjoy water transportation and we find the other fields that enjoy this water transportation did not have the same economic problem that we had. Our people were destitute, they had no work. The coal mines absolutely closed down and pulled the steel out.

Mr. PITTENGER. Are your people unanimous for or against this? Mr. WELLS. I am glad you brought this up, because I am just getting into that question. You know, people are rather prone to

forget the past, especially if it is bad. You recall all of the psychologists will tell you that, and that is a good thing because you would worry yourself to death. I am probably one of those who will do that, but in looking to the future, I think we can all see a pretty highly competitive year staring us here in the face, and we in the Big Sandy Valley do not want to get back into that same situation that we were in following the last war, and up until the beginning of this one.

Now, since you brought up the question, are they all in accord on this Big Sandy River improvement business

Mr. PITTENGER. I do not want to mislead you. Mr. Dondero, my distinguished colleague from Royal Oak, said that he had a petition where 32 chambers of commerce had adopted resolutions against this. I am cited in this happy condition, I have got 160 of them that are against the St. Lawrence seaway and power project, but most of them are from sections of the country that did not know what they were doing. I will trade you 100 of those and will not charge you anything.

Mr. WELLS. We have had this situation, as far as going to a chamber of commerce to get a resolution endorsing or opposing a project, that they have not been approached on; the first fellow that gets there and tells them a glowing story, and especially if it is a railroad company that puts out a booklet that costs $30,000 to distribute, labeled the "$65,000,000 question," is where it shows the railroad companies with these huge engines and long coal trains and all of that sort of thing that have not been running for a long time, and go to them in these communities where the coal is marshaled in these yards and a lot of railroad employees live, and a lot of railroad employees have gained places in the chamber of commerce and on the city council, it is pretty hard to go in and defeat those fellows.

Mr. PITTENGER. It is not impossible, is it?

Mr. WELLS. No, because we have run into this situation, that during the course of this project there have been changes of personnel on some of these chambers of commerce, and during the time that the railroads had a dominant force on there, they made opposing resolutions and then when some of those fellows would get beaten they would make one endorsing the situation.

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Mr. RANKIN. On that subject of the force of propaganda, it reminds me that Mr. Kerr, of California, who used to be in the House, used to tell me of an old long-haired agitator who went through Asia Minor some years ago, stirring the people up and warning them that they were headed for disaster, that they were rapidly exhausting the supply of flint out of which they were making their arrow spikes, and tomahawks. He got them excited and he hoarded it and created a panic that lasted three or four hundred years.

So, you never can tell what kind of propaganda is going to sway the people and bring a barrage of telegrams like we have before us here now.

Mr. DONDERO. Both for and against.

Mr. WELLS. There is an organization, gentlemen, that is calledMr. DONDERO. You understand that it is intelligent if it is for the project, and if it is against it, it is propaganda?

Mr. WELLS. There is no question about it.

Mr. PETERSON of Georgia. In this connection, we have several communications in favor of the project, one from Ashland, Ky., from Mr. Slade, the secretary of the Ashville Building and Construction Trade