data on the Federal investment, Federal and non-Federal annual charges, and the total Federal and non-Federal annual charges for the plan of improvement. TABLE 39.-Annual charges Federal investment (construction period 5 years): Estimated first cost to the Coast Guard for navigation aids__ Total Federal investment_. Interest during construction (3 percent of $116,941,000 for 1⁄2 of the estimated construction period of 5 years). Gross Federal investment_ Non-Federal investment (construction period 5 years): Interest during construction (4 percent of $3,169,000 for 1⁄2 of the estimated construction period of 5 years) Gross non-Federal investment Federal annual charges: 3 percent of Federal investment.. Amortization of Federal investment_ Increased annual maintenance and operation... Total Federal annual charges. Non-Federal annual charges: 4 percent of non-Federal investment Amortization of non-Federal investment_ Increased cost of maintenance and operation of bridges Total non-Federal annual charges___ Total Federal and non-Federal annual charges. XVI. DISCUSSION Amount $116, 741, 000 200, 000 116, 941, 000 8, 771, 000 125, 712, 000 3, 169, 000 317, 000 3, 486, 000 3, 771, 000 1, 168, 000 806, 000 5, 745, 000 139,000 23, 000 46, 000 208, 000 5, 953, 000 135. Scope of the project.-A navigable connection between the Warrior-Tombigbee system and the canalized Tennessee River will not only make water transportation accessible to the local tributary area in Alabama, Mississippi, and Tennessee but will also provide a direct barge route for through traffic between gulf coast ports and the improved inland waterway system of the North Central States. In addition, it will furnish a canalized alternate return route largely through slack water for the up-bound traffic now having to breast adverse currents in the open Mississippi River, making it possible for the water carriers to accomplish their trips with less motive power. The benefits resulting from the saving in time and distance thus afforded can be expected not only to stimulate the development of local resources but to have considerable influence on the interchange of business between extensive regions of the country more remote from the project. 136. Plan of operation. The function of the canal and its connections as a through route between the Gulf of Mexico and the Ohio, upper Mississippi, Missouri, and Illinois Rivers involves the construction of a canalized channel and locks of standard dimensions, to permit the transit of tows of normal size without breaking formation. 86805-46- -12 The plan assumes the replacement of existing locks 1 to 7 on the Warrior-Tombigbee waterway as planned in House Document 56, Seventy-third Congress, and House Document 276, Seventy-sixth Congress, as warranted improvements of the existing WarriorTombigbee waterway. Ample water supply is available from the Pickwick pool of the Tennessee River development. The maximum probable drain on this pool will reduce the power output at Pickwick and Kentucky hydroelectric plants by a value of between $60,000 and $100,000 a year, but the management of the Tennessee Valley Authority has expressed its opinion that the benefits to that enterprise from provision of the proposed connecting channel will subsubstantially outweigh any such loss from reduced power production. Reexamination of prospective navigation requirements has occasioned considerable revision in the design of the structures contemplated within the general plan of improvement, and this revision coupled with a sharp rise in labor and material prices has substantially modified the cost estimates submitted in the report under review. 137. The navigation pools as proposed in the plan of improvement would be confined largely to waterway channels, thereby causing a minimum of damage to adjacent lands and improvements. The navigation structures along the improved Tombigbee River upstream from Demopolis would not materially increase flood heights, and the structures would have no adverse effect on any present or authorized flood control or other stream-improvement work. There is no possibility of effectively coordinating hydroelectric power, flood control, and other beneficial water uses with the plan for navigation. 138. Basic data. -Since the submission of the report under review, the involvement of the country in war has brought about sweeping changes, not only in the construction field but in the general transportation situation, that render the estimates in House Document 269, Seventy-sixth Congress, largely out of date. Transportation facilities of every kind have been taxed almost to capacity. The production and delivery of essential fuels and raw materials and the distribution of manufactured products have been turned into unaccustomed channels. Consequently, it has been necessary to investigate price trends in materials and manpower and to canvass the latest and most reliable sources of information on the past, present, and probable future flow of traffic, in order to predict with confidence the type and size of facilities required and the function of the proposed project in the pattern that will be assumed by postwar commerce. Fortunately, a waybill survey revealing the normal volume, consist, and direction of flow of Nation-wide freight movement was available for analysis. Studies of cost scales and water-carrier performance records were advanced to the point where much more up-to-date estimates of probable costs and potential tonnage and savings could be made for this report than were possible in 1939. 139. Diversion of up-bound traffic. -From parallel studies of commodity statistics and the logs of towboat masters for a consecutive period of years, appropriate values were assigned to the avoidance of retarding currents in typical water-carrier operations on the open Mississippi River between New Orleans and Cairo and the portion of the up-bound traffic that could profitably be shunted to the proposed canalized return route via the Tombigbee was determined. Statistics for the past 12 years indicate that the growth of nondivert ible upstream traffic on the lower Mississippi has been sufficient to maintain a healthy demand on the available equipment, and the diversion of tonnage adapted to the Tombigbee route would not have occasioned any "lost motion" whatever. The commerce of such lower Mississippi way ports as Memphis, Helena, Vicksburg, Natchez, and Baton Rouge would not have suffered at all by reason of the diversion, either in diminution of scheduled barge-line service or in volume of tonnage. The diversions would scarcely have kept pace with the growth of local traffic and would have consisted of through tonnage that would bypass these ports in any event. The propriety of claiming savings on diverted tonnage to the proposed improvement is apparent when it is considered that the traffic already enjoys the benefits of water transportation and that it is only the incremental saving in distance and time that is credited to the connecting waterway project: 140. Rate adjustments.-Approximately two-thirds of the traffic accepted as reasonably prospective for the proposed improvement could now use existing water routes to greater advantage than rail routes, and the probable savings have been determined by comparison of water rates via presently available routes with probable future water rates via the proposed route constructed on the same basis. Rail rates applying on the remaining third of the prospective tonnage movements have undergone extensive changes since submission of the 1939 report. The most extensive reduction, said to average about 38 percent on the movement of petroleum products from the Southwest to consuming areas north and east of the proposed canal, is temporary in nature, designed to last during curtailment of normal coastwise tanker service. Its period of effect has recently been extended from June 30, 1945, to March 31, 1946. In view of the marked economic advantage of barge and pipe-line transportation of refined oil products, future rail competition for this type of business may no longer be considered a dominant factor in the postwar commerce of the tributary area. A decision of the Interstate Commerce Commission in Docket 28300, lowering the general level of rail class rates in the South and from the South to the Northeast, will have a negligible effect on the savings computed by rate comparisons herein, because the commodities adapted to transportation via the proposed improvement now move by water or pipe line or by rail at commodity rates which are not affected. A decision by the Interstate Commerce Commission in Ex Parte 148, raising commodity and class rail rates an average of 4% percent, might have a more profound effect on the computed savings. This rise in rates has been authorized but is being suspended by temporary orders every 6 months, presumably until the formal ending of the war and of the consequent heavy freight business of the railroads. If advantage were to be taken of the authorization with respect to the rail rates entering into the rate comparisons for the Tombigbee-Tennessee project, the resulting annual savings would be increased by about $500,000. Credit has not been taken for this additional amount because of the customary practice of the carriers, wherever permitted by regulatory authority, of foregoing authorized increases in rates competitive with barge service on the waterways. 141. Traffic trends.-Freight traffic during the period from 1939 to 1945 has more than doubled in volume not only on the railroads serving the region traversed by the proposed canal and its connections but also on the inland and Gulf Intracoastal Waterway systems that will be most directly connected by the improvement. Part of this growth undoubtedly may be ascribed to military needs, but waterways are provided for service both in peacetime and in wartime, and the navigation facilities so vital to the movement of war burdens require years to construct and cannot be provided after an emergency has descended upon the country. So far in its history this Nation has been in a state of war about 12 percent of the time, and the safest view would seem to be that the end is not yet. Although its contribution to national security does not lend itself to precise evaluation in a report of this kind, the proposed shortened route for strategic materials and military and naval craft between decentralized inland industrial areas and deep-water ports in the most critical periods of the present war would alone have been sufficient to justify the cost of the proposed improvement. Likewise, the improvement of social and economic conditions assignable to better recreational opportunities and enhanced land values in the tributary area is a real and substantial benefit even though it cannot be precisely measured in dollars. At any rate, the steady long-term upward trend in inland waterway traffic, clearly indicated in the ton-mileage chart, plate II, has continued through the years of peace as well as war, and this could be taken to warrant an even more liberal estimate of future water-borne tonnage and savings than has been made. 142. The prospective traffic, including the tonnage expected to be diverted from the Mississippi River, is preponderantly upstream freight in an almost 10 to 1 ratio. That a lack of balanced haul is characteristic of existing transportation routes may be seen from the traffic statistics of railroads of the area as well as of the Mississippi River, upon which the upsteam tonnage was 87 percent of the whole in 1943. This condition, which emphasizes the value of the proposed route for upbound traffic, has been given full recognition in the analysis of prospective water carrier operation, cost and savings. The advent of pipe lines into the tributary area has changed the aspect of the petroleum movement, not because they are essentially as economical as tanker-barge transportation but because, being industry-owned, they will be used by their parent companies to reach their tributary areas in preference to other means, in disregard of the slight disadvantage in cost. They are not considered common carriers in the broad sense of the term, however, and there will always be a substantial volume of independent production seeking the barge routes in order to compete in markets accessible to the waterways. Furthermore refined products may possibly be brought into gulf ports from nearby Caribbean and Mexican refineries and placed aboard barges for transportation to the interior by way of the Tombigbee-Tennessee waterway. The expansion of coastwise and deep-sea trade routes by the Maritime Commission and diplomatic commitments made with Latin America may be expected to furnish substantial tonnages of phosphates, nitrates, and similar fertilizer materials for import and inland distribution by waterway. None of these sources of new traffic is definite enough to warrant claims of navigation benefits in dollars and cents, but they are worthy of favorable consideration in reaching conclusions as to future justification for the proposed project. 143. Diversion of water from the Tennessee River.-A letter from the chairman of the Tennessee Valley Authority, submitted for considera tion at the public hearing held in Mobile, Ala., May 28, 1945, is appended to this report as exhibit A. It recognizes that some diversion of water from the Pickwick pool, possibly up to 400 cubit feet per second, would be necessary in connection with the operation of the proposed canal, but does not regard this loss as a serious reduction in the power potentialities of the Tennessee River. The chairman restates the considered view of the Authority that transportation benefits resulting from the proposed improvement would very greatly exceed in value the losses to the Tennessee Valley Authority power from diversion of that volume of water. A draft of 400 cubic feet per second on Pickwick pool would provide for lockages substantially in excess of the average requirements of the traffic estimated herein. as prospective for the waterway. 144. Incidence of benefits.-The introduction of a shorter and more direct low-cost water transportation route is expected to reduce the combined cost of production and distribution in the areas thus connected. This will enable producing centers in the general tributary area to compete in distant as well as nearby markets, just as similar improvements have done for their respective tributary areas in the past. A considerable portion of the savings would doubtless be "pocketed" by the producers if that were practicable, but because of the keen competition characterizing the enterprises which will make use of this inland water route, the transportation savings will, in the final analysis, be reflected in the prices to primary producers and ultimate consumers, else the markets would be lost to competitors.. 145. Effect on the national transportation system. Of the 5,764,000 tons of barge-borne commerce estimated in justification of the proposed improvement, approximately half would be diverted from overland routes. This volume represents less than 1 percent of the tonnage hauled by railroads of the southern region in 1944 and less than 11⁄2 percent of the tonnage handled by these same railroads in 1939. The total predicted waterway tonnage is less than the net annual variation in the tonnage of these railroads in any single year of the past decade. Unless competitive rates are set below cost in order to stifle barge transportation the proposed waterway should not present any insurmountable problems of adjustment to overland carriers. XVII. CONCLUSIONS AND RECOMMENDATIONS 146. Conclusions.-The Board has given careful consideration to the facts revealed by survey and public hearing relative to the cost of providing an adequate connecting channel through the territory to be traversed, and on the volume of tonnage physically and economically adapted to advantageous movement via the improvement. The Board is of the opinion that the construction of the proposed waterway is feasible from a structural viewpoint, and that the benefits which would accrue would be national in scope and character and of sufficient magnitude to warrant the undertaking of the project by the United States. 147. Recommendations.-The Board therefore recommends that the United States undertake the construction of a waterway to connect the Tombigbee and Tennessee Rivers by way of the East Fork of the Tombigbee River, Mackeys Creek, and Yellow Creek, so as to provide a channel of not less than 9 feet in depth and a minimum bottom |