4

was in regard to the waybills, and then we permitted them to see the waybills. We provided and made available desk space, typewriters, and our people even were made available to them.

Mr. DONDERO. The statement was made that there would be predicted savings of $2,500,000 compared to. $51,000 predicted savings in the 1939 report. Was the later figure based upon questionnaires or field inquiries?

Colonel FERINGA. No; you are thinking of the railroad waybill studies.

Mr. RANKIN. Bauxite has come in in the last few years.
Colonel FERINGA. It comes from the South.

Mr. PETERSON of Georgia. I think if there is a misunderstanding between the parties, you should get together as to the availability of this study and this information and it ought to be cleared up.

Mr. ROBY. Mr. Congressman, we were told that the waybill study was used. Well, the waybill study, that does not mean anything except this, that it is the reported movement for 12 days, 1 day in each month for 1939, which has been furnished by the Board of Investigation and Research, and that showed the movement under the regular heading of Rail on the forms that the Interstate Commerce Commission insists on and the railroads follow.

Mr. PETERSON of Georgia. You say you were turned down? Did you request to see them?

Mr. ROBY. Only our representative who we had to go around there. We have no office here, and so we sent a representative.

Mr. PITTENGER. The clerk of the committee has informed me that the railroads do have men who get from the clerk of the committee these reports just as soon as they are made available.

Mr. PETERSON of Georgia. If these gentlemen had asked for this data of the Board of Engineers, the Board of Engineers certainly should have furnished it to them.

Colonel FERINGA. Before it was available; this gentleman [indicating] says some one asked for it and did not get it.

Mr. PETERSON of Georgia. Who asked for it?

Mr. ROBY. We have an agent here by the name of Beck. He does all our messenger work up here.

Mr. PETERSON of Georgia. And Mr. Beck asked for it and was refused?

Mr. ROBY. I do not know he was refused; he just did not get it, and the underlying data came from the waybills.

Colonel FERINGA. I think Mr. Beck should be produced.

Mr. ROBY. May I say one word, Mr. Rankin?

I am not charging these engineers with withholding information. My point is, we tried and worked hard to find where this information came from, on the theory that we could not get it.

Mr. RANKIN. You are questioning the integrity of the Army engineers and should have your witnesses here to testify. You have raised the point, and you should have your witnesses here.

Mr. DONDERO. I do not think this witness has raised a question as

to the integrity of the Army engineers.

Mr. PRINCE. I do not think there has been any such charge and we would be the last people to make any such charge. We do not for 1 minute question the integrity of the Army engineers.

Mr. DONDERO. That is the difference between 70 percent rail and 3 percent waterway, so that there would be left 27 percent for other means of transportation.

Mr. PRINCE. During the war the percentage of motortrucks fell very rapidly because of all the limitations due to gasoline, tires, and their being unable to replace parts of motortrucks. In 1941 they handled 7.7 percent of the total traffic. In 1944 they were only handling 4.7 percent of the traffic.

Mr. DONDERO. Have the trucks made much inroad on the railroads? Mr. PRINCE. Freight and passenger service?

Mr. DONDERO. Both.

Mr. PRINCE. It has made inroads in passenger traffic, and it is conceivable certainly that with the great progress made in the development of cargo carrying in this war that it may have an effect on freight traffic.

Mr. DONDERO. The reason I asked that is I have noticed strawberries shipped from Louisiana by air which formerly used to go by rail.

Mr. PRINCE. Yes, sir; there is certain traffic that goes by air, and I have no doubt we will see more of it in the future.

Mr. PETERSON of Georgia. This traffic which goes over the highways, I suppose you have the same element there of the Government furnishing the highways. Now do you consider that as a serious competitor to the railroads?

Mr. PRINCE. Yes, sir; to the railroad man there could be but one answer. They are tremendous competitors, particularly on shorthaul items, and it is generally of the type of traffic which we refer to as the high rated traffic, high revenue traffic. They have made tremendous inroads on our business.

Mr. PETERSON of Georgia. What is the other traffic?

Mr. PRINCE. I will read you the full list for the year 1941:

Steam railroads, 64.3 percent; Great Lakes, 13.9 percent; rivers and canals, 3.6 percent; motortrucks, 7.7 percent; oil pipe lines, 10.4 percent; electric railroads, 1.1 percent; total, 100 percent. This is intercity freight. It does not include air traffic as we did not have air freight in 1941. That was something that came in with the war.

Mr. Chairman and gentlemen, I have about concluded my remarks. I hope you will bear in mind that General Wheeler said that they would not recommend a project which did not have a ratio of at least 1 to 1 and the ratio on that figures 1.05 to 1.

I think there are certainly a number of these items which won't move, some of them not at all and others certainly not in the volume that they have predicted, and I think I have demonstrated that the savings are bound to be exaggerated to a certain extent. The amount you cannot determine, but on all that traffic by rail on which there is an existing water route available and the 2,666,000 tons of it-that is pretty nearly half of the total tonnage still on the rails-athough there is an existing water route bearing a cheaper rate and it has not shifted, you know that the savings are exaggerated to a certain extent on all that traffic.

Mr. RANKIN. Mr. Prince, my opinion is that this waterway will not have the slightest effect on the traffic of the railroads, but if it did not do anything else except to give a slack water route for returning traffic now on the Mississippi River, it would justify every dollar that will be put into it.

Mr. PRINCE. That would mean, according to the engineers, spending $5,900,000 a year for the benefit of $1,200,000 a year. I do not think our Government should proceed on such a premise.

Mr. RANKIN. The Mississippi River is a great highway of commerce, one of the greatest of the world, and I think it is paralyzed because of the impossibility of ascending the river at anything like a reasonable cost; and with this short slack water route it would give the shippers of this country the benefits of the swift current coming down and then the slack water route ascending. It would stimulate railroad traffic, as the barge line to Birmingham did.

Mr. PRINCE. May I ask you to bear in mind about the Mississippi River being the greatest inland water route in the world, and when our traffic witness comes on and gives you an exhibit showing the density of traffic of these commodities on the Mississippi River and its tributaries, compared with the density of traffic which would be on the Tombigbee-Tennessea waterway if the predictions of the traffic by the engineers are realized-it is a striking comparison when you see how great the density would have to be upon the Tombigbee River attributed to those waterways as compared with the actual density today on the various segments of the Mississippi River system. I do not think you could help but come to the conclusion that in some way they have erred in their traffic studies. Thank you.

Mr. DONDERO. I would like to hear what you have to say in rebuttal, Colonel Feringa.

Colonel FERINGA. Could I go down the line very briefly? It will not take very long.

Mr. DONDERO. I wish you would. I would like to hear your

answers.

Colonel FERINGA. Mr. Chairman, I just jotted down the various items Mr. Prince presented and I would like to answer them while they are fresh in my mind.

I would like to say definitely and without any equivocation that we do not use the Mississippi River traffic twice. We credit to this proposed project only the increased savings made possible by the slack water route. We do not debit anything which has heretofore been credited to the Mississippi. We take advantage of the increased savings, the net savings as are put down in our report.

Mr. DONDERO. Well, Colonel, do you refer to existing traffic or prospective traffic?

Colonel FERINGA. When we talk of Mississippi traffic we are talking about existing traffic on the Mississippi. We do not credit to this new route the entire savings made on the Mississippi plus the increased savings made available by the Tennessee-Tombigbee. We credit to the new route only the increased savings made possible due to moving by slack water instead of bucking the current, so we do not rob the Mississippi in order to pay the Tennessee-Tombigbee.

Mr. DONDERO. The allegation made here is that two-thirds of this traffic, not now using water routes, does not do so, but uses the railroads. What is your answer to that?

Colonel FERINGA. I will have it later in my notes but I can answer it now. As Mr. Prince brought out, we consider traffic that might make use of the waterway at a saving over rail traffic, but which does not now make use of the waterway due to there not being a great enough saving. For instance, traffic might not move by water from

posed waterway, if all the imported ore is to move inland as ore?" Right at this point it is proper to state that the reduction plant of the Aluminum Co. of America located at Mobile consumed in 1944 over 500,000 tons of imported bauxite.

The traffic manager of the Lister Hill plant testified at the Mobile hearing before the Board of Engineers that his plant consumed annually 200,000 tons of bauxite. The rail rate on bauxite ore from Mobile to Lister Hill presently, and during the war, is and was $1.61 per net ton. The Board of Engineers claims an average saving of 90 cents per ton on bauxite ore moving via the proposed water route; and, in the case of shipments to Lister Hill, it is unbelievable that the proposed water service can effect a saving of 90 cents per ton, and handle the bauxite at a profit, from Mobile to Sheffield, a distance of 519 miles over the proposed water route, at 71 cents per ton; bearing in mind that to effect that saving, the per-ton rate of 71 cents would have to include loading charges from vessel to barge at the port, unloading charges at Sheffield, and charges for the rail movement of 11 miles beyond Sheffield, in addition to transportation cost by water.

Discovery made within the last week of the fact that shipments of ore to Lister Hill have recently ceased is an important development in the consideration of this project. The railroad serving Lister Hill found that shipments of bauxite ore had stopped moving into that plant. Inquiry at the plant developed that the Lister Hill reduction plant, for converting ore into alumina, will discontinue that process just as soon as the supply of ore on hand, consisting of but a few cars, is converted. Thereafter the Lister Hill plant will not draw in ore and reduce it into alumina. Instead, alumina will be drawn into Lister Hill from the Jones Mill, Ark., plant. This changed program, according to the advice of plant officials at Lister Hill, is the result of the Reynolds people, operators of the Lister Hill plant, having leased for a minimum period of 5 years the Arkansas plant at Jones Mill. This new set-up removes from the calculations the tonnage that was anticipated in the movement of ore to Lister Hill.

Nevertheless the Board estimates that there will be an annual north-bound movement of 253,000 tons of alumina at an estimated saving of $370,000, equivalent to $1.46 per ton. Alumina moves by rail in closed cars, in what is known as covered hopper-bottom gondolas. It must be protected from the elements. To afford that same protection if the movement were by water, it would have to move in closed or covered barges. Alumina is a light, powdery substance and tends to blow away unless transported in tight and covered equipment.

The covered hopper cars used to transport alumina are specially constructed equipment which cannot be utilized for loading of all bulk commodities. Railroads used covered hoppers to move cement as well as alumina, but when such cars have been used for cement they must be thoroughly cleaned by sandblasting (an expensive process) before they can again be used to carry alumina. An important fact bearing on the movement of alumina to Alcoa is presented in these circumstances: The Aluminum Co. of America, operating the Alcoa plant, has invested considerable money, probably between three-fourths and one million dollars, in covered hopper cars. These cars of Alcoa ownership are used by the railroads along with railroad

owned equipment of the same type, and the railroads pay rental, like they do on all other privately owned equipment, for the use of the Alcoa cars. This privately owned equipment has been used, and is being used right now in the transportation of alumina from Mobile to Alcoa.

At the Mobile hearing, a representative of the Mobile Chamber of Commerce, also connected with the Mobile plant of the Aluminum Co., made mention of the annual movement of alumina as amounting to 220,000 tons from that plant. He did not say that that tonnage, or any part of it, would move via the proposed waterway; and, from what has been herein stated, there is no reason to believe that it will. However, the Board of Engineers apparently considered all of that tonnage and 33,000 additional tons, or a total of 253,000 tons, would move by water if the Tombigbee-Tennessee Canal is constructed.

Mr. DONDERO. Do you know whether the engineers took into consideration the special consideration to be given alumina in arriving at their figured costs?

Mr. PRINCE. No; I do not, Mr. Dondero.

Colonel FERINGA. I think we did, Mr. Dondero.

Mr. DONDERO. They said that the cars would have to be sandblasted. In other words, a barge that was used for cement would have to be sandblasted before they can haul alumina in it, and that was quite an expensive thing to do.

Colonel FERINGA. They have covered barges on the waterway, just like covered railroad cars.

Mr. ROBY. The point is that it is one way with most of our equipment. I assume that there would be some barges. In other words you always have to return the car empty to the loading point.

Mr. RANKIN. You do not have to return the barges?

Mr. ROBY. Mr. Rankin, if they were loaded with cement and were put in use without sandblasting, you might contaminate the alumina.

Mr. RANKIN. As it is now, you might load the barges going both ways.

Mr. DONDERO. The witness has said that they have to sandblast those cars before they can use them for that particular type of transportation of that particular article.

Mr. BOYKIN. Why do you have to do that?

Mr. ROBY. Cement has a tendency to adhere and it would not do for that to get in the alumina.

Another point should be borne in mind in considering the movement of alumina by water from Mobile, and that is the fact that there are no facilities at the Aluminum Co.'s plant at Mobile for a direct movement of alumina from the plant to a barge. The plant is adjacent to the public bulk-handling plant of the Alabama State docks, and the imported ore moves over the dock facilities. Should outbound alumina be shipped by water, special facilities would have to be installed for the movement of alumina in the opposite direction of the ore, and it must be assumed that in that event the regular charges for tippling, wharfage, and trimming of the barge, amounting in the aggregate to 60 cents per net ton, would be assessed against the tonnage.

Now, fertilizer is a commodity which moves freely in the South, but it moves for short distances; and, by reason of that fact, instances are few where water transportation is employed.

86805-46-16