INCREASE OF THE CAPITAL STOCK OF THE INLAND WATERWAYS CORPORATION WEDNESDAY, MARCH 28, 1928 UNITED STATES SENATE, COMMITTEE ON COMMERCE, The committee met, pursuant to the call of the chairman, at 10 o'clock a. m., in the committee room, Capitol, Senator Wesley L. Jones presiding. Present: Senators Jones (chairman), Gould, Sackett, Nye, Fletcher, Ransdell, Sheppard, Simmons, Hawes, and Tyson. The CHAIRMAN. The committee is called this morning for the purpose of holding a hearing on Senate bill 1760, the purpose of which is to increase the capital stock of the Inland Waterways Corporation, to which bill an amendment is proposed by Senator Shipstead. We will have the bill and the amendment printed in the record. (The bill and amendment are here printed in the record, as follows:) [S. 1760, Seventieth Congress, first session] A BILL To increase the capital stock of the Inland Waterways Corporation Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the first sentence of section 2 of the act entitled "An act to create the Inland Waterways Corporation for the purpose of carrying out the mandate and purpose of Congress as expressed in sections 201 and 500 of the transportation act, and for other purposes," approved June 3, 1924, as amended, is amended to read as follows: "The capital stock of the corporation shall be $15,000,000, all of which is hereby subscribed for by the United States." Amendment intended to be proposed by Mr. Shipstead to the bill (S. 1760) to increase the capital stock o the Inland Waterways Corporation On page 1, after line 10, insert the following: "SEC. 2. The last sentence of such section is amended to read as follows: 'There is hereby authorized to be appropriated the sum of $10,000,000, in addition to the $5,000,000 already appropriated, for the purpose of paying such subscription.""" STATEMENT OF CLEVELAND A. NEWTON, GENERAL COUNSEL FOR THE MISSISSIPPI VALLEY ASSOCIATION The CHAIRMAN. Give your name and occupation and the capacity in which you appear. Mr. NEWTON. My name is Cleveland A. Newton. I am general counsel for the Mississippi Valley Association. The CHAIRMAN. Please describe that association. Mr. NEWTON. The Mississippi Valley Association is an organization made up of chambers of commerce, mayors of cities, business 1 organizations, and business men in 23 States of the Mississippi Valley. It comprises those States that border on the Mississippi from New Orleans to Minneapolis and St. Paul, and includes those States which border on the Missouri River clear to Montana, and the States that border along the Ohio River, and States that are interested in this inland water navigation. Of course this barge line situation is, to our people, a very serious situation. We are located in the interior of the country where the rate problem is a serious problem. We have looked over Senator Shipstead's bill, and we think there ought to be a great many additions to it in order to meet the problem, and in order to have a better understanding between the Mississippi Valley and the rest of the country as to what our desires and purposes are. Realizing, as we did, that there was a suspicion on the part of some people in different sections of the country as to the extent to which this Government barge line operation would extend, we find there are people who think that this means permanent governmental operation, and that there are people in the valley who are wanting the Government to carry their freight. In order to eliminate any suspicion of that kind, we have formulated certain basic principles defining our position and purpose, and we have submitted those basic principles to the officials of the Mississippi Valley Association, and our position is this. Of course, we are in the interior where the freight rates went up during the war. The railroads have not been able to reduce them, and it looks like they will not be able to reduce them, and in order the help the interior of the country we have got to have a better rate, and we do not see any way to get it except on the river, and we know there is no way to get navigation on the river unless certain fundamental things must be done; and we have submitted the question to the organizations of the valley as to whether or not, as soon as those fundamental objects have been accomplished, it is satisfactory to the people of all the valley that we get out of that operation. These fundamentals are three in number. First, in order to have successful operation, you must have a channel completed. We have plenty of water in the valley. We have spent altogether on our inland rivers, some $250,000,000, but the only river that has been completed is the Monongahela. The Warrior River is about completed and the Ohio will be done next year. The project from St. Louis to Cairo was estimated to cost $20,000,000, and we have spent about one-fourth of that. The project from Chicago to Minneapolis was to cost $21,000,000, and we have spent about one-fourth of that. The project from St. Louis to Kansas City was to cost about $20,000,000, and we have spent about one-third of that. The Illinois River will soon be in condition for navigation. You see, the job has not been finished anywhere. In order to have navigation you must have three things, you must have the channel; but even when you get the channel, the problem is not solved. In addition to a channel, we have got to have terminals. In addition to terminals, and just as important as the channel, is an arrangement for interchange of freight between rail and water lines; in other words, an arrangement so that you can have a full cooperation between the rail and the water lines. Those are the three essentials. You can not make a successful barge-line operation and the valley get the benefit of its operation, unless you can have an exchange of freight between the rail and water lines. The most constructive thing that has been done in connection with waterways was section 500 of the transportation act, which declared that the policy of Congress was that we should develop rail and water transportation both in full force and vigor. That has gone a long way, and the Interstate Commerce Commission has been moving in that direction; but the only thing we are asking is that the trunk-line waterway should be treated as a part of the transportation system, just as a trunk-line railway, and that the interchange of freight should go freely, so that freight which originates inland may go a distance by rail and then a longer distance by water, and that going to the Southwest, or into some other country, by rail again; and that we might have the division of freight adjusted so that it would be fair to both the rail and water lines. When we get those things, there is no question about the success of this barge line. The barge line has been making headway in the lower Mississippi in spite of its unimproved channel, in spite of its lack of terminals, in spite of the total inadequacy of its equipment, and in spite of the fact that it probably has not more than 50 per cent of the exchange with railways that it ought to have. In spite of all these things it has been operating and making money every year, and it has been doing that, if you please, carrying freight at 4.15 mills per ton-mile as against the average of 11 mills per ton-mile for the railways. There is no doubt in our minds, and we have gone far enough with this experiment to know, that when these rivers have been improved, and when the channel is completed and we get a free exchange of freight-and when you get that you are going to get the terminals— it will succeed. The private interests along the line are building the terminals, and if you could give them any stability in prospect they are ready to build them all up and down the river; so that we know that there are private interests if we can get the channel fixed and the provision for the exchange of freight. Our proposition is this: As soon as we can get established in the law-if we can get fundamental principles put into the law-so that those things will be done, then we want to get back to private operation, because we are convinced that private operation is more efficient and is less expensive than any Government operation can be, and we are convinced, if we can carry freight now and make money on the lower Mississippi at 4.15 mills per ton-mile as against 11 mills by the railroads, that when the improvement has been made and these basic principles have been established, we can do what they are doing in Europe; we can carry freight for probably one-fifth of the rail rate. Here is the vital thing that strikes us. We are out there in the Middle West. Our farmers are a thousand miles inland. Our manufacturers are being driven away from us, and those that stay there are being forced to build branch offices or branch factories along the seashore. Many of our products are manufactured where we have factories in Illinois or Wisconsin or Minnesota, and in order to go to Seattle, for instance, have to be hauled a thousand miles by rail to either Baltimore or New York-practically all of our freight for Seattle goes by rail to New York-and shipped from there. |