ernment operation; because when you have created the conditions that will attract private enterprise, there is no question that business will be doubled; but we know if you undertake to take Government protection away, private enterprise could never live through such a controversy as is necessary to get these rates adjusted. The agency of the Government is necessary to do that and to do it expeditiously, and then when you get through with these preliminary jobs, when you get the channel improved and your large terminals built, whenever you do that I say drop the enterprise, turn it over to private enterprise, and they will do that for you to-morrow if those things are done, and they are protected. Then we will have the problem solved.

I want to call attention to the statutes, as to the phraseology which we think ought to go into this bill, and which will bring about the conditions I have been describing.

Senator SIMMONS. Mr. Newton, I want to ask you a question before you conclude.

Mr. NEWTON. I will be glad to answer any questions you have to ask, or will try to answer them.

Senator SIMMONS. You would extend the barge line from Minneapolis clear down?

Mr. NEWTON. The barge line is operating now from Minneapolis. Senator SIMMONS. It is operating now from Minneapolis?

Mr. NEWTON. Yes. We have a new barge line that has operated only for a few months, a branch barge line.

Senator SIMMONS. How far do you propose to extend?

Mr. NEWTON. We want to extend it up the Missouri as fast as we can, and get a channel to Kansas City, and to go above Kansas City. It ought to go into the wheat country.

Senator SIMMONS. It has reached Minneapolis, and you want to extend it now up the Missouri River?

Mr. NEWTON. Yes.

Senator SIMMONS. You want to get the commerce adjacent to the Mississippi River?

Mr. NEWTON. Yes; and the tributaries.

Senator SIMMONS. And its tributaries. That is a very fine scheme. Mr. NEWTON. We want to get to the Great Lakes.

Senator SIMMONS. That is, a great line of waterway from Minneapolis to the sea. We have over here on the Atlantic coast, east of the Alleghenies, an inland waterway that is practically completed from Boston to Beauford, N. C. We have provided for the appropriation of $6,000,000 to carry it on to Wilmington, N. C., and we have provided to buy a canal in Senator Fletcher's State 300 miles, which is to be a part of it. It will soon be completed from Boston to Jacksonville, Fla., at an expense to the Government, probably, of $125,000,000 or $130,000,000.

Senator FLETCHER. To Miami.

Senator SIMMONS. I should have said Miami. It will cost certainly $125,000,000 or $130,000,000. I speak only approximately, but I am sure it will cost that, when we consider the expense we have been to in buying these toll canals, and converting them into free canals, like the Cape Cod Canal, and three or four others. We are digging a canal, it is dry cut part of the way, part of the way through the sounds that skirt the Atlantic Ocean. It is going to be a very costly thing.

Have you any objection to that in the West? If the Government is going to use its funds to develop water transportation along the Mississippi River, which would bring in the commerce of that great area on either side of that stream that passes through the Central West, are you willing to support a similar proposition of the Government, to operate a line of similarly owned boats upon this waterway, that would gather up the commerce of all the rivers that flow out of -the Alleghenies into this canal?

Mr. NEWTON. I am glad the Senator has asked me that question. I was a Member of the House until a year ago for eight years, and I was a member of the Rivers and Harbors Committee. I consistently and continually worked for the canal of which the Senator speaks. I am in favor of a meritorious waterway anywhere, because I think it is an economic benefit. All that you can save in the transportation of freight is profit, because every dollar that goes into the cost of transportation is a part of the cost of the product when it goes on to the market, and every dollar you can save in the cost of transportation is profit to the public. I am in favor of governmental operation upon any line until you have brushed away the network of obstructions that have grown up under the system of rate making during the past years, and as soon as you have reached that point, I think the Government ought to get out of it.

Senator SIMMONS. Exactly. We are having on that part of the line that has been completed the same trouble

Mr. NEWTON. On the rate question?

Senator SIMMONS. With the railroads on the rate question that you had in Mississippi on the rate question. If we establish a line, as has been done several times, from Norfolk to my town, 170 miles it will not be long before, by some sort of manipulation, that line, though it may be prospering, will be withdrawn. You had the same conditions on the Mississippi.

Mr. NEWTON. Yes.

Senator SIMMONS. And that has protected you against this, and it has stabilized the transportation on the Mississippi. We are in need right now of some stabilization of transportation along this waterway, and some protection against the manipulations and the devices and the arts and schemes of those who would suppress water competition.

Mr. NEWTON. I think the policy has to be stabilized as a matter of law. We have to work out a national policy. Section 500 was the most valuable thing, and went a long way. The Interstate Commerce Commission assumes an entirely different attitude, but prior to that they seemed to regard water transportation as an enemy to the transportation system. Now they begin to regard it as a part of the public's interest to give service.

Senator SIMMONS. It is.

Mr. NEWTON. But it has not gone far enough and fast enough. We think we have provisions in this bill which will enable that to move faster, because we do not think we are every going to reach the maximum of efficiency and the full benefit of water transportation until we get a proper adjustment of rates that will protect these water lines against unfair competition. I think the railroads, as Senator Hawes said, are taking an entirely different view. There are certain stockholders of the railroads who have the old idea that

you ought not to let waterways develop. But the railroads are going to be benefited by this thing.

Here is a thing that impresses me. I give you this as an illustration and I think it is a fair indictment. Some two or three years ago David Lloyd George the premier of Great Britain, was over here. He made a trip through Canada, and then came through the States and come to St. Louis. He spoke at a luncheon, and that afternoon he asked that they take him up and let him see the Mississippi River. He drove all the way up and down the river for some 20 miles, but did not make any comment. That evening they were at dinner, and some of the St. Louis people asked him to give them his impressions of our country. He hesitated for a moment and then said, "Do you want my impression frankly?" They said they did. He said, "You know, the thing that has impressed me about the United States more than anything else I have seen is your utter extravagance and waste. You are the most wasteful and most extravgant people on earth." He said, "You waste every year in utter extravagance enough to feed the entire populations of Europe. The pressed him to get closer to the point, and he said, "I will tell you. Here you are in the city of St. Louis. You are located on the bank of the greatest river in the world, that flows 2,000 miles through the entire continent, and through a great productive area of the world. I have been riding up and down the banks of it. That river is capable of moving your commerce at one-fifth of the rate the railroads could give. I have been all up and down the river, and it is idle, practically; I have not seen anything moving. What do you think would happen to a river like that in Europe? Do you ever stop to think that you could save four-fifths of the cost of transportation on the great quantity of your products, that would be all profit? That is waste; that is extravagence."

We think it is, and in connection with your statement, Senator, about the canal paralleling the Atlantic coast, we are in favor of it. Senator SIMMONS. Mr. Newton, you have the greatest river in the world, but this inland waterway connecting the sound system of the Atlantic seaboard when it is finished is going to be equally as great a waterway for the purposes of commerce as you have in the Mississippi.

Mr. NEWTON. I think so, too.

Senator SIMMONS. Bearing out what you said, I have the impression that if the railroads would cooperate with the waterways, they would find, instead of being an impediment, that they are a source of great help and benefit to them. I recall just what you have said. In 1908, I think it was, I went down the Rhine on a boat furnished us by one of the Governments, I do not remember which one. The Rhine was just teeming with boats, generally barges pulled by great, powerful tugs, going both ways, but on either side of that river there were several tracks of railroad, the trains running both ways all the time, like our city suburban street car lines, both methods cooperating, each to the benefit of the other, I was told. That is what we want to see in this country, and that is what I think we will see in the years to come.

Mr. NEWTON. Senator, do you realize that this survey shows that there are some 25,000,000 tons of freight waiting to go on the river, and wanting to go at a cheaper rate? Do you realize, for instance,

take from Pittsburgh to the wheat district, the improvement of the Ohio will be completed next year, and if we had the improvement of the Mississippi completed, and the improvement of the Missouri completed up to Sioux City, you could take great quantities of raw materials and food products from the Missouri River district and haul them by water to Pittsburgh, and take the manufactured products at Pittsburgh and haul them to the Missouri River district, and as a result of that eliminate about four-fifths of the expense? That is going to be beneficial to the United States.

Let me call attention to this: We are a hundred per cent for your waterway, and we are committed to this principle. I think when we have worked out these principles as fundamental that certain things can be accomplished. The Government will stay in the business until they are accomplished, and if the Government wants to get out of the business, let us accomplish the principles and get out of the business. If you keep on for 20 years procrastinating, the Government will be in the business 20 years. But let it be known that the Government is determined to get the benefit of the water transportation.

Do not misunderstand me, we are in favor of your coastwise waterway. There is no doubt but that inland waterway transportation can be made cheaper than ocean waterway transportation. As I understand, the rate by ocean is about 3 mills per ton-mile, and when you take into account the fact that one towboat leaves St. Louis and makes a trip to New Orleans with six barges, carrying enough freight to load 600 freight cars, or 12 full trains with 50,000 pounds to each car and 50 cars to each train; when you realize that one of those big tows will carry enough freight to load two average ocean steamers, with a crew not as big as that of one ocean steamer; and when you realize that we can finally develop, because of the difference in conditions of transportation, an inland transportation which is cheaper than ocean transportation, you find this difference that makes our condition more imperative even than yours, because you have the ocean between Florida and Boston, and you can use a coastwise steamer, but we can not get a coastwise steamer. We have 11 mills, where you can get by on 3. Our situation is even more desperate than yours.

Senator SIMMONS. Our inland waterway is not going to be exactly competitive with our coastwise trade. We can not use the barge system consistently at sea.

Mr. NEWTON. I agree with you.

Senator SIMMONS. But you can use the barge system with great success on an inland waterway like this, and this appears to be, in my judgment, a great barge system, so far as the system of transportation goes and operates.

Senator RANSDELL. Answering to some extent the question of the Senator about the feeling of the West, is it not a fact that your people would like very much to see some kind of connection between the Mississippi River, through Mobile, where you have connection now, on to Florida, and up the Atlantic coast, Congress already having provided for the entire coast of Louisiana and Texas, away over to Mexico, so that your commerce originating, perhaps, up as far as Minneapolis, could go around the coast all the way to Boston without breaking bulk? You would like to see that, and you will assist in that, will you not?

Mr. NEWTON. We would like, through the canal, to be able to deliver a barge loaded in Minneapolis, or Yankton, S. Dak., if necessary unloaded at Boston, and we would like to see it go down the canal on the other side and be unloaded at Corpus Christi, Tex.

Senator RANSDELL. I believe this transportation system of ours is a mighty whole, and we ought to pull together for the benefit of all. You are for Senator Simmons's system?

Mr. NEWTON. Yes; we ought all be for it, because it is of benefit to the whole country.

Senator SIMMONS. Let me ask you another question, and I will not trouble you further.

Mr. NEWTON. You are not troubling me.

Senator SIMMONS. I want to see not only your system made effective for the purposes of water transportation, but I want to see our system perfected. I want to go further than that. I want the great Mississippi system linked with this inland waterway system along the Atlantic coast. You have tributaries running away up into the interior. We have tributaries running from this inland waterway away up into the interior.

All that is needed to link those two systems is a railroad answering the purposes of a bridge between those two great tributary systems. When that bridge is provided-and we have nearly provided it nowyou will be able to get to the Atlantic Ocean from St. Louis at a point nearest Europe, a much shorter distance than you have now to go.

You link the inland water system of the great West with the inland water system of the East, and in that way you will have not only your Mississippi transportation, if you have any left-I think they have taken most of it away from you-but you will be able to get to the Atlantic Ocean at a point where it will enable you to deliver your goods destined for Europe at a point nearer than you can get them

now.

Mr. NEWTON. The people of the Mississippi Valley have suffered from the freight situation until they realize, probably as no other part of the country does, the importance of cheap transportation. I can assure you that the people of the Mississippi Valley are a hundred per cent for a meritorious waterway project anywhere within the confines of the territory of the United States.

Senator SIMMONS. That is what I want, a utilization of our waters to the fullest extent.

Senator HawEs. I want to ask you several questions relating to this barge line. Before we get away from the matter of railroads, as a matter of fact the railroads are not permitted to-day to make what is called an out-of-pocket rate. They are prohibited from doing that by the Interstate Commerce Commission. The testimony is now in our records, in the House records, at least, that wherever a railroad to-day attempts to make an out-of-pocket rate, the commission will stop them if a protest is made. So that you have made that development and that progress.

Mr. NEWTON. We are making progress, there is no doubt.

Senator HAWES. That principle is established, so that a railroad to-day can not destroy the waterways, as they did in former years. I think you will find that is the ruling of the Interstate Commerce Commission.

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