STATEMENT OF EDGAR O. ANDERSON, REPRESENTING THE ILLINOIS COAL TRAFFIC BUREAU, THE CENTRAL ILLINOIS DISTRICT COAL TRAFFIC BUREAU, NORTHERN ILLINOIS COAL TRADE ASSOCIATION, CHICAGO, ILL.

Mr. ANDERSON. Mr. Chairman and gentlemen of the committee, I am appearing here as a citizen and taxpayer of the State of Illinois. I am representing a number of producers, the names of which have not been correctly stated, but they do appear in the statement which I have prepared, and they are the Illinois Coal Traffic Bureau, the Central Illinois District Coal Traffic Bureau, the Belleville Fuels, Inc., the Fifth and Ninth Districts Coal Traffic Bureau, the Northern Illinois Coal Trade Association, and Middle States Fuels, Inc., all of which are opposed to this proposed project and the expenditure of this $83,000,000 of the taxpayers' money, of which they will be called upon to pay a share. All of these associations that I have mentioned are coal-producing companies which own and operate bituminous coal mines in the State of Illinois, producing over 77,000,000 tons of coal annually.

I have also prepared a group of exhibits which I wish to file, along with this statement-one of which is a map that shows very clearly and outlines the various districts in which coal is produced in the State of Illinois. It also shows the mines that are located in Indiana and western Kentucky and Illinois, three States which produce approximately 130,000,000 tons of bituminous coal annually.

There are a number of points in this statement that I would like to make, but for the sake of brevity

Mr. DONDERO (interposing). May I interrupt you there? Do any of your people transport their coal by water from your mines in Illinois?

Mr. ANDERSON. Some of the mines in southern Illinois have found it necessary to seek water transportation to some of the points on the Mississippi River. The volume is very small.

There are five important points in this statement that I would like to bring out here and ask you gentlemen to kindly give serious consideration to them.

In the first place, there is an ample supply of biruminous coal in the Middle West and the mines located in Illinois, Indiana, and western Kentucky. They have demonstrated their ability to supply the entire needs of the country in the States of Minnesota, Iowa, Wisconsin, the Dakotas, Nebraska, and Missouri, not only in normal times but under extreme emergency, such as we have experienced in the past 4 years. The engineers' report fails to mention anything about the production of coal, bituminous coal, in the Middle West, and their ability to supply the markets that you have been told are crying for this coal from the Big Sandy Valley.

Second, we have an unemployment situation over in Illinois, just as bad as you have any place else in the mining districts. In normal times we have signs posted on the mines, also, such as you heard about here yesterday, but they are different signs. They don't say "No work tomorrow." They say "No work today." They leave those signs up for a number of days at a time. I want to point out to you that in this statement I have submitted exhibits that were prepared

by the Works Progress Administration on the unemployment situation during the period 1935, 1936, and 1937, and it shows the deplorable conditions that existed there in the Illinois coal fields, and I would like to have you compare those figures with the ones that you have in the record, that were shown regarding conditions over in the Big Sandy district.

Third, there has been a lot said here about the relativeness of rates, freight rates on coal, I haven't seen very many definite figures and concrete figures, but I would say this, that where it involves a matter of rates I believe this committee should seek the benefit of the tribunal that has been set up by the Congress to handle those matters.

Not so many years ago there was a similar project to this Big Sandy proposal; the Cuyahoga Canal from the Ohio River to Lake Erie for the purpose of transporting freight and commodities. Congress asked the Interstate Commerce Commission to make a survey of that situation to determine whether or not it was in the public interest and necessary-the volume of traffic, and so forth-and I firmly believe that your committee in order to get a clear picture of this situation should also call upon the Interstate Commerce Commission to make its survey to give you the unbiased facts as to the necessity for this improvement.

And, last, I want to also call your attention to the fact that Illinois coal has been used for some length of time for metallurgical coking purposes.

Mr. DONDERO. May I interrupt to say that your suggestion is a very pertinent one, but do you think that you are going to get one Government agency to come in here and testify against another Government agency? [Laughter.]

. Mr. ANDERSON. Mr. Congressman, my thought was for you to get the facts, the pertinent facts, and you have the privilege of calling upon the Interstate Commerce Commission to provide you with a survey, just like you did in the matter of the Ohio Canal, proposed Ohio Canal.

Mr. DONDERO. I will admit that we have a precedent on that point now in the question before Congress of whether or not the armed forces of the country should be merged into one body.

Mr. ANDERSON. I don't think it is a matter of merging the Interstate Commerce Commission with your committee or with the Army engineers. It is purely a matter of getting at the facts. I want to say that for the past 18 months the Koppers United Coke Co. at Granite City have been using an enormous quantity of Illinois coal for metallurgical coking purposes, using 70 percent of Illinois coal and 30 percent of the eastern coal, and that has worked out very satisfactorily. So this cry for metallurgical coking coal does not seem to carry as much weight as the proponents claim.

Mr. DONDERO. I desire to be fair, but I am wondering whether or not there is any competitive spirit between the Illinois coal fields and the West Virginia and Kentucky coal fields?

Mr. ANDERSON. I suppose there is a competitive spirit between all producers, Mr. Congressman, but I want you to know that the Illinois producers do not want to be taxed to build a highway so that their competitors, I don't care who they are, can send 15,000,000, or even 8,000,000, tons of coal into the normal market of the Illinois producers. (Mr. Anderson submitted the following papers:)

I am appearing for the Illinois Coal Traffic Bureau, also the Central Illinois District Coal Traffic Bureau, Belleville Fuels, Inc., Fifth and Ninth Districts Coal Traffic Bureau, Northern Illinois Coal Trade Association, and Middle States Fuels, Inc., in opposition to the proposal which is here under consideration to canalize the Big Sandy River and the Tug and Levisa forks of such river.

The Illinois Coal Traffic Bureau and the others I have mentioned are voluntary associations of the coal-producing companies which own and operate bituminous coal mines in the State of Illinois, except the Middle States Fuels, Inc., which is the marketing agency for bituminous coals produced in the Fulton-Peoria district in Illinois.

Substantially two-thirds of the State of Illinois and approximately one half of the western section of the State of Indiana are underlaid with coal. Immediately south of the Illinois and Indiana fields is the large Western Kentucky bituminous coal field. I have prepared a map which I would like to present as an exhibit showing the coal-producing districts in Illinois, Indiana, and western Kentucky and the geographical boundaries of such districts as they are constructed for freight-rate purposes.

On this map1 we have also shown the location of the Mississippi and Illinois Rivers and a part of the Ohio River, The close proximity of the Illinois coalproducing districts to the Mississippi River and the fact that the Illinois River dissects some of them, should be especially noted.

Illinois is the third largest bituminous-coal-producing State in the United States, and the southern Illinois and central Illinois districts are the first and second largest producing districts in that State.

I have prepared an exhibit which I would like to present showing the number of tons of bituminous coal produced in the United States, in Illinois, and in the southern Illinois district during the years 1933 to 1944, both inclusive, and the percent that the production in Illinois was of the total for the United States as well as the percent that the production in the Southern Illinois district was of the total in Illinois. This exhibit shows that in 1944, Illinois produced 77,400,031 tons of coal or 121⁄2 percent of the total produced in the United States, and that the southern Illinois district produced 27,864,829 tons or 36 percent of the total in Illinois. In 1944, the central Illinois district produced 18,255,781 tons of bituminous coal. In that year Indiana and western Kentucky produced 28,140,000 and 19,938,256 tons of bituminous coal, respectively.

The Illinois, Indiana, and Western Kentucky coal districts are generally known collectively as the midwestern coal field. The figures which I have given show that the total production of bituminous coal in this Midwestern field in 1944 was 125,478,287 tons.

The normal markets for Illinois coal are at destinations in Illinois, Iowa, Wisconsin, Minnesota, and Missouri. The Illinois mines ship a small tonnage to destinations in South Dakota, North Dakota, and Nebraska. They are precluded from shipping any appreciable quantity of coal to points in Indiana, Michigan, or States east thereof, because of the competition of coal from mines in Indiana, Ohio, Pennsylvania, West Virginia, Virginia, and Eastern Kentucky. They are also precluded from shipping any appreciable quantity of coal to points in the States south of the Ohio River, because of competition from mines in western Kentucky, eastern Kentucky, West Virginia, Tennessee, and Alabama. They are shut out of the markets in the Southwestern States because of competition with coal from mines in Kansas, Missouri, Arkansas, and Oklahoma.

The southern Illinois and other Illinois mines and their employes are, therefore, almost wholly dependent for their continued operation and employment upon the markets which exist for Illinois coal in Illinois, Iowa, Wisconsin, Minnesota, and a part of Missouri, particularly, St. Louis. Their tonnage to destinations in these States alarmingly declined during the period preceding the present war due to the displacement of their coal by natural gas and other substitute fuels, and by coal shipped by rail and by rail and lake, or rail, lake, and rail from mines in eastern Kentucky and West Virginia, by rail, and in some cases by truck from mines in Missouri and Iowa, and by rail from mines in Missouri, Kansas, Arkansas, Oklahoma, Colorado, and Wyoming.

In its reports, the United States Bureau of Mines, Department of the Interior, has stated that 1923 was the first normal year after World War I. 1939 was the last year unaffected by the present war. The total tonnage shipped by the southern Illinois mines to destinations in their normal market territory, as I have described it, declined from 22,098,784 in 1923 to 9,527,783 tons in 1939, a loss of 12,571,001 tons or 56.9 percent. The tonnage shipped from the Illinois mines as a whole to

1 Not printed; on file with the committee.

such territory declined during the same period 23,525,638 tons or 48.6 percent. During the same period the tonnage from the central Illinois district to such marketing territory declined 13,553,904 tons or 54.6 percent.

Coal mining is the only industry of any consequence in the southern Illinois and most of the other coal-producing districts. The tremendous decline in the production of coal in, and the shipment of coal from such districts, during the several years preceding the present war caused widespread unemployment and consequent deplorable economic conditions in such districts. I have prepared an exhibit which I would like to submit showing the total population in the State of Illinois and in Franklin, Gallatin, Saline, and Williamson Counties, which comprise the southern Illinois coal-producing district, and the number of persons and percentage of the total population which was on public relief during the years 1938 to 1941, both inclusive, in such State as a whole, and in such counties because of the widespread unemployment caused by the depressed condition of the coal industry due to the inability of the southern Illinois mines to find sufficient markets for their coal to enable them to operate more than 2 or 3 days per week. This exhibit shows that in 1938, 461⁄2 percent of the total population in the four counties comprising the southern Illinois coal-producing district was on public relief because of unemployment, and that as late as the year 1941, 351⁄2 percent of the total population was being supported by public assistance.

The depressed economic condition in this mining district was so pronounced, in fact, that the Federal Government through the Work Projects Administration, conducted a survey for the purpose of attempting to find some method of alleviating the unemployment and depressed condition which existed in such coal field. The results of this survey were published in the United States Labor Review for December 1939. For convenience, I have had this article reproduced as an exhibit, which I would like to present. This exhibit corroborates the previous one which I just presented, and shows that many of the mine employes in the southern Illinois district in 1939 had been unemployed for an average of 5 years. It also shows that the number of shipping mines in such district declined from 105 in 1923 to 40 in 1937.

This article gives a complete and detailed authoritative description by a Federal Government agency of the depressed economic condition and widespread unemployment which existed in the southern Illinois coal-producing district in the years immediately preceding the present war and it requires no further elaboration

The decline in the production of coal in, and the shipments of coal from, the southern Illinois and other Illinois districts, and the widespread unemployment in such districts during the period prior to the present war did not result from any deficiency in the quality of coal produced in such district or in any decreased capacity of the mines, because it is generally recognized that the southern Illinois district produces one of the highest qualities of bituminous coal produced anywhere in the United States. It is low in ash, moisture, and sulfur and high in B. t. u. content. The mines in such district, and for that matter, in the State of Illinois as a whole, are highly mechanized. The producers in such district and in the State of Illinois as a whole, have invested millions of dollars to purchase and install the latest coal washing and preparation plants. Such mines, together with the mines in Indiana and Western Kentucky, produce, prepare, and offer for sale every size of bituminous coal which is required to meet the needs of all of the various types of consumers, industrial, domestic, railroad, public utility, etc., in the midwestern territory in which their coals are normally marketed, except possibly certain consumers requiring a special-purpose coal, which accounts for a small proportion of the total consumption in such territory.

Nor are such conditions due to any failure on the part of such coal producers to properly merchandise their coal because the southern Illinois mines also maintain large and efficient sales forces which travel throughout the Midwest and comb every city, town, and hamlet for business. Such conditions were due solely to the decreased demand for coal in the Midwestern territory due to the marked increased efficiency which has been accomplished during the past several years in the utilization of coal, the displacement of coal by natural gas, manufactured gas, fuel oil, and other substitute fuels, and by coal from mines in other territories, such as eastern Kentucky and West Virginia, which moved in large part by rail and lake, or rail, lake, and rail, and by coal from such mines and mines in other States moving by rail, and in some cases by truck.

When the United States entered the present war, the Federal Government encouraged the southern Illinois and other Illinois mines to substantially increase their production for the purpose of supplying the tremendously increased quantities of coal required by war industries which could not be supplied by mines

in other districts. The exhibit which I have presented shows that the production in the southern Illinois district increased from 11,321,671 tons in 1933 to 27,864,829 tons in 1944, an increase of 16,543,158 tons or 146 percent, and that the production in Illinois as a whole increased from 38,320,125 tons in, 1933 to 77,400,041 tons in 1944, an increase of 102 percent. Such exhibit shows that in contrast with this increase in production in southern Illinois and in Illinois as a whole, the production in the United States as a whole increased during the same period by 85,8 percent. These figures clearly demonstrate the tremendous productive capacity of the mines in the southern Illinois and other Illinois districts, and their ability to so gear operations as to meet the requirements of the coal consumers in the entire Midwest territory.

Large investments of money have been made by the southern Illinois and other Illinois coal producers in their mines for the purpose of producing and preparing these large quantities of coal which are required to meet the normal needs of consumers in the midwestern territory, and which were required to meet the needs of consumers in other parts of the country during the war emergency. This investment would be impaired, if not in a considerable part destroyed, if the project which is here under consideration is approved and coal from eastern Kentucky and West Virginia is transported by barge on a waterway constructed and maintained at the taxpayers' expense, including the taxpaying coal producers of Illinois and their employees, hundreds of miles into the back yard and normal markets of the Illinois mines, for the purpose of displacing the coal which such mines produce.

With the return of normal conditions during and following the postwar period, it is obvious that the production and consumption of coal in all territories will substantially decline. The southern Illinois and other Illinois mines are almost solely dependent for their existence and continued operation upon their ability to market their coal in their normal markets in Illinois, Wisconsin, Iowa, Missouri, and Minnesota. As previously stated, they have no other outlet for the coal which they produce. Contrasted with this, the eastern Kentucky and West Virginia mines have numerous outlets and markets for the coal which they produce. They ship their coal to the vast industrial sections of the eastern part of the United States by rail, and rail and lake, and by tidewater, that is, by rail to the eastern seaboard and by boat beyond. They ship vast quantities of such coal by rail to points in the South and to points throughout the central and midwestern part of the United States. They also ship large quantities of such coal by rail to ports on Lake Erie for transshipment beyond by boat to ports on the other Great Lakes, such as Lake Michigan, Lake Ontario, and Lake Superior. They have a large market for their coal in Canada to which they ship by rail and by rail and lake. They also ship their coal for export through the eastern seaboard and south Atlantic ports.

None of these markets are available to the Illinois mines, except those in the Midwestern States, which I have previously named, and a very small proportion of those in Canada.

There is absolutely no necessity for the construction of the proposed canal here under consideration from the eastern Kentucky and West Virginia coal counties involved from a transportation, economic, or marketing standpoint. The coal mines in such counties are served by two railroads which are generally recognized as the largest, most efficient, and best equipped coal carrying railroads in the United States. Because of the numerous outlets and markets which they have for their coal, and of the satisfactory rates and service afforded by the railroads which serve them, the eastern Kentucky and West Virginia mines, which the proposed canal would serve, have been able even during the prewar period to operate almost full time throughout the year and to increase their production and shipments far more than have other mines in the same territory, and to substantially increase their production even while the production of coal in, and the shipments of coal from other districts, such as the southern Illinois and other Illinois districts were substantially declining. For example, in 1940, the mines in Floyd, Johnson, and Pike Counties in eastern Kentucky operated an average of 208, 226, and 209 days, respectively. In eastern Kentucky as a whole, the mines operated an average of 210 days, and the mines in McDowell and Mingo Counties in West Virginia, operated an average of 219 and 199 days, respectively, during that year. During the same year, the mines in Franklin, Saline, and Williamson Counties in Illinois, which comprise the southern Illinois district, were able to operate an average of but 150, 176, and 159 days, respectively, because of a lack of markets for their coal, while the mines in the State of Illinois were able to operate an average of but 169 days during that year.