Senator HAWES. And the railroads in some cases are putting down double tracks, but they are not increasing the actual mileage for transportation purposes. Is not that a correct statement?

Mr. LYNDE. I think, if anything, it is decreasing. I think there is a very slight, a miscroscopic decrease.

Senator HAWES. There is a decrease. Now, this is a water supplementation for the purposes of transportation which will help the 25 or 30 States in the valley?

Mr. LYNDE. That is the view we have of it, sir.

Senator HAWES. May I ask you just one further question: Do you believe that the Government should pay the entire cost of flood-control in the alluvial valley? I am going to ask every man here to answer that question.

Mr. LYNDE. Yes, sir; I do, and I think I am correct in stating that the organization I represent here, the Association of Commerce of Chicago, also approves that.

Senator HAWES. The reason I am asking you is that you never made your position very clear, very strong before the committees of the House or the Senate. We have been fighting for this $500,000,000, and you are asking for a barge line, and I want to know whether you want the right of way fixed and the Government to pay for it.

Senator FLETCHER. Your view is that you could not probably sell this barge line now to any private concern at anything approaching its value? You could not do it now; could you?

Mr. LYNDE. No, Senator; I do not think you could, because the job is not completed, because conditions are uncertain.

Senator FLETCHER. And your position, further, is that you will not be able to do that until the three things you mention shall have been accomplished?

Mr. LYNDE. That is exactly it, sir.

Senator FLETCHER. So that in answer to Senator Gould's question about the Government's making a lot of investment there as a sort of a subsidy, as he called it, the actual fact is that it is the only way in which you can save the investment you have made?

Mr. LYNDE. That is exactly the situation.

Senator SIMMONS. There is just one point about your statement with which I am not satisfied. I understand that you want the Government to establish this line of boats. Then you want the railroads to cooperate in the making of joint rail-and-water rates with the Government?

Mr. LYNDE. Yes, sir.

Senator SIMMONS. But you do not want any private operator of boats on that line or anywhere on that line to have the benefit of those rail-and-water rates until the commission has settled the question of convenience and necessity. Is not that the Government itself setting up a monopoly?

Mr. LYNDE. No, Senator; I respectfully submit that it is not.

In the first place, the Government has its own investment now. It is operating these lines. It is entitled to a reasonable protection as to that. In the second place, we feel that the shippers of the country should have some certainty of service. There should not be published joint rail-and-water tariffs with a water line unless that line has some real backing, unless it is capable of performing the service, unless it has some guarantee of continuance. We think the

commission, or some authority—it is immaterial where the power is lodged- should pass on those things, because, after all, it is a public service that is being performed; and we think that in view of its being a public common-carrier service, conditions of that nature are reasonable.

The CHAIRMAN. May I ask one question? I understood you to say that the rates charged would be one-fifth of the railroad rates. Mr. LYNDE. No, sir; that statement is incorrect. There is a misunderstanding about that.

The CHAIRMAN. Tell us what you mean, then.

Mr. LYNDE. I did not say that, Senator. The fact is this: The Interstate Commerce Commission has fixed a differential between rail and water rates that is approximately 20 per cent of the all-rail port-to-port rates.

The CHAIRMAN. Twenty per cent only, or 20 per cent lower?

Mr. LYNDE. Putting it in figures, assuming that the rate were $1 from St. Louis to New Orleans for all-rail, the commission says that where water transportation between St. Louis and New Orleans enters in as a factor in the making of a rate, we will say from Chicago to New Orleans, the difference between the rail and water rate from Chicago to New Orleans shall be 20 cents-in other words, 20 per cent of that $1 all-rail rate-and that is a rule that is applied as to the making of all rates: That is merely an example.

The CHAIRMAN. That makes it much plainer.

One other question: I have not had an opportunity to look up the situation, but I understood you to say that the barge line now is making money.

Mr. LYNDE. Yes, sir.

The CHAIRMAN. Does that take into account depreciation, interest, and so on?

Mr. LYNDE. There is no interest in that, because the Government has put in its money in the form of stock; but there is depreciation. The CHAIRMAN. Yes; but it seems to me interest should be taken into account if you are going to determine whether or not it is making a profit.

Mr. LYNDE. The situation is that there is no lawful or contract requirement for the payment of interest. You can figure interest, of course, in any way you wish.

The CHAIRMAN. Then you have not taken it into account?

Mr. LYNDE. No, sir; and that is not required under the accounts required to be filed with the commission.

The CHAIRMAN. But you have taken into account the element of depreciation?

Mr. LYNDE. Yes, sir.

The CHAIRMAN. And insurance?

Mr. LYNDE. Yes, sir.

Mr. NEWTON. We set aside last year over $400,000 for depreciation. Senator FLETCHER. Is there any private operation now on the river in competition with the barge line?

Mr. LYNDE. In one sense, yes. There are private carriers that carry by contract what you might call charter parties. They compete with the Government Line to the extent that they carry traffic that might otherwise move over the Government's line. Otherwise, however, I do not understand that there are.

Senator FLETCHER. Is that mainly passenger traffic or freight? Mr. LYNDE. The Government line does not carry passengers. Senator FLETCHER. I did not suppose so; but there are passenger boats?

Mr. LYNDE. Oh, yes.

Mr. NEWTON. Mr. Chairman, we have two other witnesses we should like to get through with. I should like to call Mr. Brooking, of St. Louis, for five minutes.

STATEMENT OF MR. W. T. BROOKING, PRESIDENT OF THE MARSHALL HALL GRAIN CORPORATION OF ST. LOUIS, MO.

Mr. BROOKING. Mr. Chairman and members of the committee: I am the president of the Marshall Hall Grain Corporation of St. Louis, Mo. I also represent the St. Louis Merchants' Exchange, which is a grain organization in St. Louis.

We have been shipping large quantities of grain on this barge line ever since it was inaugurated. For the fiscal year ending May 31, 1927, we ourselves shipped 2,500,000 bushels of grain from St. Louis to New Orleans. For the nine months ending February 29, 1928, we have shipped 1,350,000 bushels of grain. At no time have we ever had sufficient tonnage to take care of the grain requirements during the grain-moving period. This past season we had a large export demand. We had a large quantity of grain available, and we could have shipped many times more than the barge-line space permitted. The rail rate from St. Louis to New Orleans is 18 cents a hundred. The barge-line rate is 112 cents a hundred. There are some disabilities connected with the barge-line rate, the matter of insurance and a little extra interest on account of delays, but this difference in rate does net the producer a very substantial benefit.

I should say that if we had sufficient barges to carry what wheat was offered during the moving period of the crop, the farmer would actually receive anywhere from 1 to 212 cents a bushel direct benefit because of this barge line.

We buy grain back into Nebraska as far as Colorado for movement down the river via the barge line to St. Louis; and during the export demand, which usually comes right during the period when the large portion of the crop moves, all markets, millers and domestic buyers are required to compete with this barge-line movement in the accumulation of their supplies. So it does confer a very large benefit upon the farmer, because it undoubtedly raises the value of the wheat right during that heavy moving period-the value of all the wheat, not only in Nebraska but in Iowa and Kansas and I presume even up into the Dakotas, in the spring wheat-territory.

Senator HARRIS. Mr. Brooking, may I ask you whether the service on this line is satisfactory?

Mr. BROOKING. There are very considerable vicissitudes connected with the barge-line business. We frequently have barges delayed on account of getting on sandbars, as a result of insufficient channel, and things of that kind; but grain is a slow-moving commodity, and we take into consideration all of those things, and we feel that we have received very great benefits from this barge line-not only the city of St. Louis as a grain market, but to the producer as well, even from the limited demonstration-and we further feel that if the

facilities were increased, and a large movement were permitted, there would be a tremendous benefit incurred to all the grain-producers of that section. There is no question at all about that.

Senator SIMMONS. I understood you to say that the difference between rail and water was the difference between 111⁄2 cents and 18 cents.

Mr. BROOKING. On grain; yes.

Senator SIMMONS. You said there was some little extra expense. What is the net difference after you have paid that extra expense?

Mr. BROOKING. We have to pay an out-turn insurance-that is, a guarantee of the weights. The weight is a net weight that the barge line gets. They do not guarantee the difference in the weight between St. Louis and New Orleans. We have to insure that. That costs us approximately 1 cent a hundred pounds; and then we have to stand additional interest on account of the slower movement. For instance, our rail movement is about three or four days, and the barge line movement is an average, I presume of two weeks.

Senator SIMMONS. Taking all those things into consideration, cant you not tell the committee about what would be the net difference, approximately?

Mr. BROOKING. I presume there is a disability there of probably a cent and a half a hundred. That would bring it down to about 5 cents a hundred. That would be approximately 3 cents a bushel. Senator SIMMONS. And you said the farmer would get a cent and a half of that?

Mr. BROOKING. No; I did not say that. I said the farmer would get from a cent and a half to two and a half cents of that. There probably would be a little-we might just as well be frank about ita little loss from the one point to another. The farmer possibly would not gain the whole difference, but he does get a very large portion of it; more so on grain, I think, than any other commodity, because we must go out and meet competitive conditions in the bidding of grain. The New Orleans exporter, for instance, will be bidding basis delivered New Orleans, based on the Rio Grande rate, which would be open to anybody to ship under; and there is very little that you can steal out of that rate in between. The opportunity is not there. Competition will not permit it; and grain rates are directly reflected back to the farmer. I can not feel any other way about it. Senator SIMMONS. I just wanted to know what part, net, the farmer got; that was all.

Mr. BROOKING. I can assure you that the farmer does benefit very materially from this reduction in the barge-line rate.

We frequently make our sales on a basis of the barge-line rate, and then we find that we can not get the barges, and we have to ship all-rail, which is at the present time a very great disability; and that happens rather frequently. We have made sales this last yearI remember in one particular instance we sold wheat for barge shipment and could not get the barges, and we had to meet a steamer commitment, and we had to load a train-load of wheat and pay 18 cents a hundred pounds where we had sold the grain on the basis of an 1112-cent rate.

Another thing: For the past two years we have been unable to do any export business at all through New Orleans excepting on the barge-line rate. I do not think our rail shipments have amounted to

more than 20 to 25 per cent of the barge shipments; and if it had not been for the barge-line rate we could not have shipped any grain for export. It would not have moved that way. The rail rate is too high to permit the business.

Senator HAWES. Let me get that right, Mr. Brooking. The farmer would save approximately 5 cents on each 100 pounds?

Mr. BROOKING. Yes; that is the differential at the present time that he would actually save.

Senator FLETCHER. He would not get that, however. The farmer gets from 12 to 2 cents.

Mr. NEWTON. A bushel?

Senator FLETCHER. A bushel.

Mr. BROOKING. You see, under the present limited facilities there, it is natural that the farmer will not get the full benefit that he would get if we could move our entire export grain down the river, because we have to move some by rail now.

Senator HAWES. It assists him just that much in competition with the wheat of the world, then?

Mr. BROOKING. Oh, yes; he has gained large benefits even from this limited demonstration.

Then another thing, it does permit us to meet the Canadian competition. The Canadian wheat moves down through the Great Lakes to Montreal at a very, very low rate of freight.

Senator HAWES. Is New Orleans providing modern methods there of transferring from the barge to the ship?

Mr. BROOKING. I do not believe there is a market in the United States, or possibly in the world, that has any better facilities than the city of New Orleans or the port of New Orleans. They have facilities there that permit them to unload grain very rapidly and efficiently.

Senator HAWES. So that wheat starting from Nebraska, traveling to New Orleans, is loaded there by modern machinery into a vessel that takes it to the foreign ports of the world; is it?

Mr. BROOKING. Oh, yes.

Senator RANSDELL. Does this saving affect only the grain that actually moves by water, or the entire crop?

Mr. BROOKING. It will affect the entire crop.

Senator TYSON. How much increase would you have in shipment if you had plenty of barges?

Mr. BROOKING. The barge line at present is hauling approximately 5,000,000 bushels of grain a year out of St. Louis. Of course they have an additional movement out of Cairo and Minneapolis. I am speaking only of St. Louis. I feel that if we had an unlimited capacity-all the barges available that we needed—that movement would probably be 15,000,000 bushels, say, three times the present movement; and of course if we had an unusual year, like the past year was, where you had a big export demand and a tremendous crop of wheat back of you, that movement might grow to extremely large proportions.

Senator TYSON. Based on 2 cents of saving to the farmer, that would be $200,000. Would anybody else get any benefit except those farmers that actually sell that ten or fifteen million bushels of wheat?

Mr. BROOKING. The grain man, of course, would receive benefit by being permitted to participate in that business; the exporter would