The mining industry in the Big Sandy Valley furnishes employment for approximately 90,000 and supports over 500,000 people.

Our two great railways, the Chesapeake & Ohio and the Norfolk & Western have an uninterrupted record of earnings extending back many years. Out of these earnings railway facilities have been constructed which probably excel any others in the United States. This is as it should be and the great service rendered to the valley by the railways is appreciated by its coal operators.

Not so with the coal industry. Freight rate differentials and high mining cost differentials have over and again penalized this great district in its competition with other mining districts. When normal markets exist and competition is keen, these differentials paralyze the coal industry in the Big Sandy Valley. The high quality of the Big Sandy coal has been urged time and again as the justification of these differentials on the basis that, due to high quality, the consumer will pay the difference. In other words our high quality has become a liability instead of an asset.

We all remember the terrible days of the WPA, when the per capita relief load in the Big Sandy coal fields was the highest of any district in the United States. Forty-two of the forty-four mines in Pike County were bankrupt. One of these remaining mines was in receivership and the other operating on borrowed capital. Over $100,000,000 in relief alone were paid into these districts during that period. When the big depression inevitably following World War II comes, we fear a return to these same conditions. These differentials have been increased by recent freight rate increases and higher wage scales.

"Competition is the life of trade.' We all realize that the spur of competition has been the underlying incentive to the growth and betterment of our American industrial fabric. Monopoly paralyzes growth and service. This is vitally true in transportation of which our railways now undoubtedly do enjoy monopolistic control in the valley. The coming of a new, unlimited, economical transportation facility into the valley will not only spur our railways into giving cheaper and better service but help to overcome these differentials which have heretofore been so destructive.

The proposed Big Sandy waterway is such a service. It has been shown that markets for Big Sandy coals adjacent to the inland waterways total over 45,000,000 tons per annum. These markets can be reached by river with savings in cost ranging from 80 cents per ton to $2.50 per ton, f. o. b. consumer bins. The sayings f. o. b. barges are much greater. These savings will absorb many of the present differer tials which destroyed us in the past. They will stimulate the development of a diversified metallurgical industry in midcontinent America stifled in the past by high freight rates on these metallurgical coals in which we excel.

We are familiar, not or ly with the vast reserves of coal, amounting to an estimated 2,300,000,000 tons within 10 miles of the river and over 8,000,000,000 tons in Pike County alone but with the vast storehouse of other raw materials contained in the valley, notably petroleum, natural gas, salt, brines, iron ore, ceramic clays, and vast forests of mixed hardwood.

And we have watched the growth of the great chemical industry in the Kanawha Valley following the completion of a 9-foot navigation stage of water over there and based on these same raw materials. And likewise, the growth of the great steel industry in the Monongahela Valley based on their metallurgical coals and following the canalization of that river. The Charleston industrial district now consumes over 4,500,000 tons of coal per annum and the Big Sandy substantially none. The coal movement on the Monongahela River last year exceeded 30,000,000 tons.

Given cheap river navigation and an abundant supply of industrial water, it is believed that a vast industrial growth will likewise occur in our valley coupled with a large local consumption of coal.

When the canalization of the Big Sandy is assured, river terminals extending from Louisa to Millard on the Levisa Fork and from Louisa to Sprigg on the Tuz Fork will be built. Abundant and economical terminal sites are available.

During periods of short-car supply, the availability of barges on the river fre quertly gives the river-connected mines a full run when the railway mines are closed down. This is experienced time and again on both the Monongahela and the Kanawha River.

It is believed that with the coming of locks and dams on the Big Sandy the industrial life of the valley will be insured.

It is likewise believed that the unlimited supply of these superlative, metallurgical coals will stimulate and cause to be built a great diversified metallurgicsi

industry in midcontinent America so greatly needed by the American people and so highly important as an element in our national defense.

Taking all of these factors into consideration, the inevitable conclusion emerges that not only the Big Sandy Valley but midcontinent America as well will benefit and benefit more largely than the cost of installing and maintaining the proposed locks and dams on the Big Sandy.

CHARLES GILLEY.

Senator HOLLAND. You spoke of being owner and operator of a small refinery.

Mr. GILLEY. Yes, sir.

Senator HOLLAND. Is that a shallow oil field, too?

Mr. GILLEY. Yes, sir; we have an oil field in there. It is not very large, but it has been producing, I guess, for about 15 years. I have been in the oil business there about 15 years.

Ashland Refinery

Senator HOLLAND. How many refineries are there?
Mr. GILLEY. I have the only one in the area.
has one at the mouth of the Big Sandy, a large one.
Senator WITHERS. Do they get their oil up the river?

Mr. GILLEY. I think 90 percent of their oil is brought by barge from up the Ohio River and then they have a pipe line about 3 miles on up to the refinery.

Senator WITHERS. That is all.

Senator HOLLAND. All right.

Mr. GILLEY. Thank you very much.
Senator HOLLAND. Next witness.

Senator WITHERS. Mr. Trivette.

STATEMENT OF CHARLES F. TRIVETTE, VIRGIE, KY.

Mr. TRIVETTE. Mr. Chairman, my name is Charles F. Trivette. I reside at Virgie, in Pike County, Ky. I am a former member of the Kentucky State Senate and for a number of years I was president of the Sandy Valley Oil Co., at Virgie, in Pike County, Ky. The Sandy Valley Oil Co. was a jobbing concern that served the upper Big Sandy

area.

At the present time I am engaged in retail trade, and with your permission, sir, I would like to read a brief statement for the record in support of the retail merchants.

Senator WITHERS. You say in support of the retail merchants. Have they joined with you in the statement?

Mr. TRIVETIE. Several of them; yes, sir.

Senator WITHERS. Do you list their names?

Mr. TRIVETTE. I do not have them with me, Senator. I am sorry. But with your permission, I will read this brief statement which I prepared myself.

Senator HOLLAND. Can you furnish us a list of the merchants for whom you are speaking, to go into the record? You can get it back by letter, if you wish.

Mr. TRIVETTE. I can.

Senator HOLLAND. Will you do that through Senator Withers?

Mr. TRIVETTE. Yes, sir.

(The list referred to above is printed on p. 782.)

Senator HOLLAND. You may proceed.

Mr. TRIVETTE. The records show that the Sandy Valley Oil Co., over a period of 10 years, paid approximately a million dollars in

taxes.

Recently I sold my interests in the Sandy Valley Oil Co. and I now devote my entire time to retail store properties which I own at Virgie, Pikeville, and Jonancy in Pike County,, and at Martin in Floyd County, Ky. I mention these facts in order to qualify myself as a small-business man, engaged in the retail trade of the upper Big Sandy area.

In the Big Sandy area there is a large group which is vitally interested in the welfare of eastern Kentucky. Among that group are many retail merchants. It is the responsibility of the retailer to not only distribute those goods which his customers are interested in getting but also in seeing to it that his community is healthy economically so that his customers can earn the means wherewith they can purchase the necessities of life and also those articles which produce comfort and satisfaction.

While the retailer provides vital services to his community, he is also a large employer. Next to the coal operators the retailers of eastern Kentucky are the largest employers.

The retailer is also one of the heaviest investors in the community, and is therefore vitally concerned as to the economic health. If the community remains prosperous his investment is safe and productive. But if the community becomes stagnant or ceases to be prosperous, then his investment not only ceases to be productive but actually stands a chance of being lost entirely.

The retailers remember the condition of the valley following the First World War and are therefore vitally concerned with conditions throughout the Nation at the present time. The prosperity of the Second World War brought another era of great economic expansion in this section but unless lower transportation can be effected for our coal output, it is reasonable to believe that disaster may strike again as it did in the late twenties and thirties. We are hoping that a normal condition can be reached without suffering another depression.

While we do not wish to be favored over other sections of our Nation, we do believe that we have a right to ask for an equal opportunity. Since coal is the basis of most wealth in eastern Kentucky, we are all concerned with the future of the coal industry. Freight differentials favor other regions over ours.

Our citizens of the Big Sandy Valley ask only to be put on a competitive basis with other regions. Our coal is among the best in the Nation and is sought by consumers, but our buyers, like all others. who are in business, are governed by prices.

Lands and properties of the Big Sandy Valley are now valued very high but that is only because they were used extensively during the recent war. Let the coal industry take a serious set-back and we will again see our property lose value. It is a sound economic principle that property only acquires value in proportion to the extent it is used. The coal industry of eastern Kentucky touches every individual, and transportation costs has its effect on coal output. Markets clamor for our coal but if our transportation costs are too high in normal times we cannot sell.

The retail merchant can transport only what he can sell. He can only sell when and where there are buyers.

This is a country of free enterprise-we still have a competitive market and a law of supply and demand. When the supply catches up with demand, the buyer seeks the lowest market. The buyer will no longer ask how much can I get-but how little will it cost?

Whenever that question of cost comes into the picture, that very minute will this added weight of high-cost transportation begin to tell.. And how does that affect the retailer?

These facts provide the answer:

1. The merchant is dependent upon the customer for his trade. 2. The customer is dependent upon his job for his income. 3. His job depends upon industry.

4. The principal industry in the Big Sandy Valley is coal and the coal industry depends upon the market price.

The market price in normal times is determined by cost of production plus transportation to the market areas and a fair profit. Whenever the cost of production and transportation to consuming areas in any given field are beyond the market price, the business leaves that field and goes elsewhere, and leaves the producer out of business. Transportation in the eastern Kentucky field is higher than average. It is too high to meet competition in normal times.

No county, State, or section can long survive which does not produce. Its prosperity, its very standard of living, depends essentially upon production. Eastern Kentucky must produce and market its coal or die economically.

Merchants need not be told this familiar story. Any shut-down of the coal mines, however brief, is reflected almost instantly in the total daily sales made over his counter. He has only to look at the total on the tape in the cash register at the end of the day to see the "handwriting on the wall."

Whatever affects the welfare of the people of any community, has a like and immediate effect on the merchant.

The industry of the Big Sandy Valley cannot continue to compete with other fields in normal times handicapped as it is with the excess weight of high transportation costs.

That is of vital concern to the retail merchant. It not only concerns him, it is his responsibility. He owes it to himself, to his employees, and to his patrons to remove this added weight.

Gentlemen, lock and dam the Big Sandy River and you are assured fair competitive transportation that will keep our industry at production on an equal with competing coal fields; it will keep our customers employed and our store shelves well stocked and keep our salesmen busy.

Thank you, Mr. Chairman.

Senator HOLLAND. Are there any questions, Senator?

Senator WITHERS. I think not..

Senator HOLLAND. The next witness?

Senator WITHERS. Mayor Britton.

STATEMENT OF C. T. BRITTON, MAYOR OF LOUISA, KY.

Mr. BRITTON. I am here pinch-hitting for Mayor Simpson of Ashland. He could not come on account of a death in the family and called me and wanted me to come up. So I have a letter here from Mayor Simpson and also I have a resolution here from the City Council of Ashland, Ky., favoring this project, which I will not take the time to read. I want to file this as a part of the record.

Senator WITHERS. Where are you from, Mr. Britton?
Mr. BRITTON. Louisa.

Senator WITHERS. Are you for this improvement, too, yourself? Mr. BRITTON. Yes, sir.

Senator WITHERS. What river is Louisa on?

Mr. BRITTON. Louisa is right at the beginning of the Big Sandy. Senator HOLLAND. At the junction?

Mr. BRITTON. The bridge at Louisa crosses both rivers.

Senator WITHERS. The Tug and Levisa?

Mr. BRITTON. We have resolutions filed from the city council, the chamber of commerce, service clubs, DAR's, parent-teacher association, and veterans' organizations, and I would like to file this. Senator HOLLAND. Without objection, it will be filed.

(Letter of Mayor Simpson and resolution referred to above, are as follows:)

SENATE PUBLIC WORKS COMMITTEE,
Washington, D. C.

(Attention: Mr. Dennis Chavez, chairman.)

JULY 14, 1949.

DEAR SIR: I have been to Washington, D. C., on many occasions with other citizens of this community and members of the Big Sandy Valley Association. Inc., who are interested in the canalization of the Big Sandy River, We have great hope and faith in our project, and it is very essential to this community and merits your committee's consideration. It has been approved by the United States Board of Engineers for Rivers and Harbors, and its authorization by the Congress of the United States of America is urged.

Most every organization in this section and the Big Sandy Valley are in favor of this canalization project. This consists of city councils, county courts, clubs and Civic organizations, chambers of commerce, merchant's clubs, realtor's and real-estate clubs, junior chamber of commerce, and other organizations throughout this valley. They have passed resolutions, which are in the files of the Big Sandy Valley Association, expressing their thoughts and seeking support. I have been chosen to represent the mayors of this section, who are interested in this project, and we ask your consideration and support.

I am writing you this letter to express my very hearty and sincere approval of this project. In so doing, I am expressing the opinion and sentiment of the General Council of the City of Ashland, Ky., which adopted a joint resolution on April, 1948, in favor of this improvement.

It is my opinion that the carrying out of this project would be of inestimable benefit to northeastern Kentucky.

I attach hereto certified copy of the above mentioned joint resolution of the General Council of the City of Ashland.

Very truly yours,

WILL C. SIMPSON, Mayor, City of Ashland, Ky.

PROPOSED RESOLUTION OF THE CITY COUNCIL OF ASHLAND, KY.

Whereas Ashland, Ky, is located near or contiguous to the mouth of the Big Sandy River on the Ohio River; and

Whereas Ashland is the second largest industrial city of Kentucky located on the south bank of the Ohio River; and

Whereas the trade area of Ashland naturally includes the Big Sandy Valley and anything beneficial to this beautiful valley is beneficial to Ashland, and the entire Tri-State area; and

Whereas it is firmly believed by the people of Ashland that the canalization of the Big Sandy River will not only benefit Ashland but will benefit the many and large industries of Ashland, more particularly the railways, bus lines, and water-transportation lines serving Ashland: Now, therefore, be it

Resolved, That the plan submitted and approved by the United States Engineer Corps and the United States Board of Engineers for Rivers and Harbors for the canalization of the Big Sandy River is hereby approved and its immediate authorization by the Congress of the United States of America is urged. [SEAL]

WILL C. SIMPSON, Mayor, of Ashland, Ky.