has appropriated and there has been expended the total sum for river and harbor improvement in those waters of $389,087,356. While traffic tonnages are not of record for all these years, data of traffic passing through the St. Marys Falls Canal since its construction in 1855 are available. Statistics show that traffic through the St. Marys Falls Canal constitutes on the average each year about three-fifths of the total traffic on the Great Lakes for such year. By use of that formula, it appears that the total traffic transported by Great Lakes vessels since 1855 is about 8 billion tons. The total cost of improvements since 1826, spread over that total traffic, amounts to about $0.00008 per ton-mile on the basis of each ton of cargo being carried a distance of 600 miles.

The ratio of traffic to total expenditures for St. Marys Falls Canal is equally impressive. Since 1855 the United States has expended for the St. Marys Falls Canal the sum of $92,702,711 which includes the purchase price paid in 1881 to the State of Michigan. Since 1855 the traffic passing through the canal has amounted to 4,374 million tons, so that the per ton cost of the improvements is $0.000026 per ton-mile on the basis of each ton of cargo being carried an average distance of 800 miles.

The total traffic which has moved over the Great Lakes since 1855 is prorated over the principal commodities as follows: iron ore, 3,369 million tons; coal, 2.067 million tons; limestone, 561 million tons; and grain, 639 million tons. The remaining 1,364 million tons would be allocated over many miscellaneous commodities for which no reliable data are available.

Great Lakes transportation has directly benefited all our people.

The iron

ore transported over the Great Lakes constitutes about 90 percent of the total iron ore necessary to the manufacture of the Nation's steel. In other words, abou 90 percent of the steel which our people have required since 1855 has been produced from iron ore mined in the Lake Superior region and transported over the Great Lakes. Limestone, too, is a basic commodity in the manufacture of steel and about 80 percent of the limestone moved in Great Lakes vessels is used by the steel industry. The bulk of the remainder of the limestone moved in Great Lakes vessels is used by the chemical industry, in the construction of highways and generally in the construction industry.

Coal transported in Great Lakes vessels has been used for many purposes by our people. It is fuel for the railroads of the Northwest and for the heating of homes of millions of people in the Great Lakes region and in the Western States. The industrial uses of coal are numerous, the steel, chemical, and public utility industries being a few such users.

The Great Lakes form an indispensable link in the movement of grain from the growing fields of the West to the milling and domestic consuming areas of the East and the exporting eastern seaboard ports. Great Lakes transportation has enabled the farmer to market his produce and the low cost of that transportation has permitted him, in no small measure, to sell his produce in foreign markets in competition with the farmers of other countries.

Low cost transportation on the Great Lakes, achieved through specially designed vessels and use of the great natural highways, made possible the manufacture of steel from which springs a multitude of other industries too numerous to recount. Whether it be the cereal served to growing children, motor vehicles, structural steel, locomotives or machinery for the generation of electrical power, enjoyed by children and adults alike in every corner of the United States, it will be found that, somewhere in the stage of its manufacture or distribution, the article was formed from a commodity moved in a Great Lakes vessel.

Equally important to our people is the contribution which Great Lakes trans portation has made to their national defense. Two world wars were successfully fought with the implements and materiel made from iron ore, limestone and other commodities transported over the Great Lakes.

If the report of the Hoover Commission intends to convey the impression that the benefits to the people of the United States in the use of the waters of the Great Lakes are secondary, the report is completely erroneous. Not only do all the people use goods and articles made from commodities transported over the Great Lakes, but the service of transporting these commodities is furnished at remarkably low cost. For example, during the decade 1941-50, a period of both war and relative peace, the United States expended $84,013,901 on river and harbor improvements in the Great Lakes, and Great Lakes vessels transported 1,859,700,170 tons of commodities. The ratio of expenditures to traffic shows a cost of $0.000075 per ton-mile. During the same decade, Great Lakes vessels transported 885,262,324 tons of iron ore over a total distance of 708 billion miles,

for an average freight of less than $0.0015 per ton-mile. During the same decade the average freight rate of railroads in moving the iron ore from the mines to the loading ports and from the lower lake ports to the furnaces was about $0.01 per ton-mile. There is a comparable difference in the Great Lakes and rail freight rates of other commodities. For all of the commodities moved during that decade as part of our national commerce the total difference between an all-freight and Great Lakes freight for the same distances would be approximately $10 billion or about $9,916 million more than the total expenditures for navigation improvements.

While in the present decade both Great Lakes and rail transportation costs and rates have increased, the relative disparity between the two nevertheless pertains. Does anyone believe that, if Great Lakes vessel freight rates were the same as the all-rail rates, the people of the United States would pay no more for the steel, cereals and other goods and commodities necessary to the civilian economy and to the national defense? The answer is emphatically in the negative. The irrefutable fact is that the savings in cost made possible by the great natural highways of the Great Lakes in their natural state and as they have been improved by the United States are enjoyed by all our people. No mode of transportation more largely benefits the economy of our people or more effectively enables them to preserve their liberties than Great Lakes transportation. That great system, renowned for its efficiency and the magnitude of its performance year after year, has grown and developed under a policy of Congress providing for the improvement and use of our public waters by all of our people without charge. The history of Great Lakes transportation, the contribution which it has made to industry and agriculture and the growth within the Great Lakes area of the world's largest industrial empire, should be adequate proof to any reasonable person that this national policy is sound beyond successful challenge.

Evidence of benefit to land transportation, as well as to all our people, is not lacking. The railroads, for instance, move iron ore from the mines to the loading ports at the head of the lakes and transport the ore from unloading lower lakes ports to the mills of the interior and seaboard.

After the iron ore is manufactured into steel its products are transported by railroads and trucks. The railroads transport coal to Lake Erie ports where it is dumped in Great Lakes vessels and transported to upper lakes ports, from which a large percentage of that coal is again transported by the railroads to the consuming areas. The railroads transport grain from the growing fields to the elevators in upper lakes ports and move it from the unloading ports to the milling and consuming areas and seaboard ports for export. If all of the commodities moved by Great Lakes vessels were suddenly withdrawn from our national economy, the reduction in traffic of the railroads and the trucking industry would indeed be shocking.

CONSTITUTIONALITY OF USER CHARGES OR TOLLS ON THE GREAT LAKES

Since the report of the Hoover Commission does not define the form of the user charge which the Congress should authorize on waterways of the United States, the constitutional validity of such a charge must be considered from at least two points of view. If it is meant that the charge should make provision for the operation and maintenance of existing improvements and the full cost of all future improvements for which expenditures will be made by the United States, the charge obviously takes on the form of an excise.

Section 8 of article I of the Constitution vests in the Congress the power to lay and collect taxes to pay the debts and provide for the defense and general welfare of the United States. There is an important restriction upon the exercise of that power in that, among other things, "Excises shall be uniform throughout the United States; ***." Clearly an excise could not be imposed upon the people of the United States for use of certain waterways in certain areas without the imposition of an excise upon all people for use of all waterways in all areas. An excise must operate generally throughout the United States (Knowlton v. Moore, 178 U. S. 41). It must at least be geographically uniform (Fernandez v. Wiener, 326 U. S. 340).

Subsequently in this discussion, it will be shown that improvements made by the United States in the waters of the Great Lakes are used by vessels trading wholly outside the United States and that substantial improvements have been made by the United States in Canadian waters. A vessel transporting a cargo of grain, for example, from Fort William, Ontario, to Montreal or overseas to Liverpool would use improvements of the United States but would not neces

sarily stop in the United States at all. For example, too, all vessels use improvements made by the United States in Canadian waters of the Detroit River. The impracticability and difficulties of collecting charges under these circumstances must be readily apparent.

Section 9 of article I requires uniform treatment of all areas and all peoples of the United States in all regulations of commerce. Whether the charge recommended by the Hoover Commission would take on the form of an excise or would be in the nature of a fee for the use of facilities owned by the United States, neither may be imposed in such a manner as to place some of our people at a disadvantage with others. The prohibition of this section is: “No preference shall be given by any regulation of commerce or revenue to the ports of one State over those of another;

***"

Excises or tolls imposed upon vessels or their owners for the use of improvements on the Great Lakes would immediately place the people of the Great Lakes area at a disadvantage with peoples of other areas and would give the latter a preference or advantage. A ready illustration of this preference would be found in the movement of goods between Great Lakes ports of the United States and Canada and other countries. At the present time, that commerce over the Great Lakes is very considerable, amounting to more than 27 million tons per annum. When the facilities of the St. Lawrence seaway are completed, that commerce is likely to increase. Much of the commerce, such as iron ore moving from Labrador to the United States and coal from the United States to Canada, may be transported either over the Great Lakes or via the Atlantic seaboard. User charges within the Great Lakes area and the absence of such charges for navigation improvements along the seaboard would give preference to Atlantic ports over ports on the Great Lakes. The prohibition against preference or advantage is directed against the Congress. It may not by any regulation of commerce or revenue place Great Lakes ports at a disadvantage with seaboard ports (State of Pennsylvania v. Wheeling and Belmont Bridge Co., 18 How. (U. S.) 421, 435).

FOREIGN POLICY WITH RESPECT TO CANADA

Earlier in this discussion reference was made of the extent to which our historic policy with respect to the free use of the navigable waters by all of our people is engrained in our organic law. Two incidents in the development of this policy are prominent in the history of the Great Lakes region. One of them was discussed by the Supreme Court in The Montello, supra. Shortly after Wisconsin was admitted to the Union, the legislature of that State granted to a privately owned corporation the right to improve the Fox River leading from the waters of Lake Michigan and across the divide separating the Great Lakes Basin and the Mississippi River. That corporation made the improvements, among which were canals and locks, and charged vessels tolls for the use of the improvements. There was so much resentment on the part of navigation interests to such a system on that ancient route of the Indians and the early settlers, that Congress, deciding to put a halt to the abuses, acquired the facilities and, in due course, permitted vessels to navigate the Fox River and to use the improvements without the payment of tolls.

The other is found in the early history of the St. Marys Falls Canal at Sault Ste. Marie, Mich. That canal, it will be recalled, was originally built by private interests under authorization of the legislature of the State of Michigan. After it was constructed and placed in operation the canal was opened to vessels upon the payment of a toll. When Congress, however, enacted legislation in 1880 authorizing the Federal Government to acquire the canal from the State of Michigan, Congress provided that as a facility of the United States the canal would be free and open for navigation without the payment of tolls. Important, too, is the Ordinance of 1787. Its provisions have always been respected in the Northwest Territory unless abrogated or modified by the Federal Constitution, by the act of a particular State on admission to the Union or on account of the Congress. Economy Light & Power Company v. United States (256 U. S. 113); Spooner v. McConnell, supra. Our National Government has required that States respect the conditions imposed upon them in their admisUnited States sion to the Union as to all matters within the power of Congress. v. Sandoval (231 U. S. 28). The navigation of the waters of the Northwest Territory is such a matter. In the reversal of our national policy, recommended by the report of the Hoover Commission, there is involved at least the good faith of the Congress in its relation to the people of the Great Lakes area.

Equally serious is the conflict which the recommendation of the Hoover Commission would arouse in our relations and good faith with Canada. Earlier it was mentioned that by treaties, dating back more than a century, the United States and Canada agreed from time to time that portions or all of the Great Lakes would be free and open to the vessels of both countries for the purposes of commerce and navigation. Those relations culminated in the Boundary Waters Treaty of 1909 which applies to the Great Lakes above the place where the boundary leaves the St. Lawrence River.

The last-mentioned treaty was clearly the result of controversies and discriminations between the two countries. Following the termination of the Reciprocity Treaty of 1854, respecting the right of citizens of the United States to navigate the canals of Canada, passage of an American vessel through the Welland Canal was denied by Canada. Subsequently Canada imposed chrges and tolls on vessels passing through the Welland Canal which gave preference to vessels laden with grain destined for Montreal or beyond for export. Citizens of the United States resented the discriminations directed at them in the use of the Welland Canal and insisted that charges be imposed upon Canadian vessels traversing the St. Marys Falls Canal at Sault Ste. Marie, Mich. Our relations with Canada were seriously impaired, but finally, by one form of agreement or another, culminating_in_the Boundary Waters Treaty of 1909, equality of treatment was achieved. For full discussion of these unhappy relations see 1 Moore: A Digest of International Law, 678, etc.

Friendly relations between the people of the two countries being accomplished and confidence in each other being restored, the United States, during the latter half of the 19th century, began making improvements in Canadian territory in the rivers connecting Lakes Superior and Huron and Lakes Huron and Erie. Mention was made above of the distance traversed by a vessel moving from Ogdensburg in the upper end of the St. Lawrence River to Duluth, a distance of 1,225 miles. Mention was also made that of such total distance only 181 miles constitute improved waters. Of those improvements the Welland Canal in Canada accounts for 28 miles and 30 miles consist of improved channels in Canadian territory made by the United States in the Detroit, St. Clair, and St. Marys Rivers. It is interesting to note that these improvements and expenditures have been made by the United States in Canada without any more sanction than is contained in the Boundary Waters Treaty and its predecessors affording the citizens and vessels of each country free and open navigation in the waters of the other. From all that appears, any resistance that may have been asserted by Canada was completely overcome by an exchange of correspondence between the diplomatic representatives of the two countries. On this point see Moore, supra, where, in the footnote, page 678, reference is made to the threat of the collector of customs at Amherstburg of seizure of “any American plant working in Canadian waters" in connection with the "proposed improvements in the Detroit River by the United States Engineers Corps. The footnote states that the British Ambassador at Washington "was requested, on July 6, 1893, in view of the pleasant relations which had previously prevailed in the prosecution of the work and of the benefit which Canada would derive from it, to obtain the permission of the Dominion authorities for the improvements to be proceeded with 'along the best lines without regard to the exact location of the international boundary line"."

The Great Lakes are not ordinary inland waters. In Moore et al. v. American Transportation Company (24 How. (U. S.) 1), the Supreme Court had occasion to differentiate the Great Lakes from other inland rivers and waters. After discussing the character and commerce of the latter, the Court said, page 37:

"But the business upon the Great Lakes lying upon our northern frontiers, carried on between the States, and with the foreign nation with which they are connected *** is of a very different character. They form a boundary between this foreign country and the United States for a distance of some 1,200 miles*** and the area covered by their waters is said to be some 90,000 square miles. The commerce upon them corresponds with their magnitude.

That these boundary waters are not amenable to the legislative will of the Congress in every respect is clear from the Boundary Waters Treaty of 1909. By the latter, the United States and Canada agreed that the waters of the Great Lakes, including Lake Michigan "shall forever continue free and open for the purposes of commerce *** to the *** vessels * * * of both countries equally, subject, however, to any laws or regulations of either country within its own territory, not inconsistent with such privilege of free navigation.

* This

*

same right of navigation shall extend * *to all canals connecting boundary waters ***” The treaty recognizes that, consistent with the privilege of free navigation, either country "may charge tolls for the use *** [of canals], but *** all tolls charged shall apply equally to the * * * vessels of both * * * [countries], and they shall be placed on terms of equality in the use thereof." The full meaning of the privileges accorded by the treaty to the citizens of the United States and Canada is apparent only when the treaty is read with knowledge of the background of abuses and discriminations which led to its adoption. No room was left to either country to tax navigation at will. The privilege of free navigation was defined so as to take from each country the power to exact any charges excepting tolls on canals and as so imposed tolls must apply equally to the vessels of both countries.

It is clear that under the prohibitions of the treaty the United States may not impose charges in the nature of excise taxes upon vessels of either country for the mere privilege of using waters which have been improved by the United States or any other waters within the jurisdiction of the United States. Not only is this restraint placed upon the Congress of the United States with respect to Canadian vessels, but it applies with equal force to vessels of the United States. If, therefore, it were to be assumed that the organic law of the United States imposes no other restraints upon the Congress to charge for the use of navigation improvements, the treaty leaves room for the Congress only to charge tolls on the St. Marys Falls Canal at Sault Ste. Marie, Mich., and other similar facilities owned by the United States. (Such facilities do not include the waters improved by the United States. The waters, themselves, lying within the United States belong to the bordering States, not the Federal Government. Wisconsin v. Illinois, supra; Martin et al. v. Waddell, 16 Peter U. S. 367. Likewise the lands under the waters belong to the States, not the Federal Government. Pollard's Lessee v. Hagan, et al., 3 How. U. S. 212; Martin et al. v. Waddell, supra.) Any other charge, whether a toll or an excise, would violate the clear terms of the boundary waters treaty.

The St. Marys Falls Canal at Sault Ste. Marie, Mich., is commonly used by 'Canadian Great Lakes vessels. Most of them, when laden, are unable to use the Canadian canal at Sault Ste. Marie, Ontario, and many of such vessels, because of size, are unable to use the latter canal at all. Canadian Great Lakes commerce, therefore, depends to a very large extent upon the American canal. In 1953 about 20 million tons or about 80 percent of the total Canadian commerce between Lake Superior and lower lakes ports passed through the American canal.

United States vessels are wholly dependent upon use of the Welland Canal in Canada for commerce moving to or from ports on Lake Ontario and beyond. It is readily to be expected that, if the United States imposed tolls on Canadian vessels traversing the St. Marys Falls Canal, the people of Canada would quickly petition their Government for the imposition of tolls on the Welland.

The initiation of tolls by the United States would clearly return the two countries to the old system of abuses and discriminations existing before adoption of the boundary waters treaty. So, in addition to conflicting with our national law, tolls or user charges on the Great Lakes would violate the good faith that the people of the United States owe the people of Canada. Not the least that may be said for our foreign policy with Canada respecting the Great Lakes is that in matters of mutual concern collaboration with Canada is required.

CONCLUSIONS

If recommendation No. 8 of the report of the Hoover Commission be intended to apply to the Great Lakes, it should be rejected from every point of view. User charges or tolls in these waters would be inimical to the general public interest; they would destroy a beneficial national policy of the free use of these waters by all our people; they would be unconstitutional and give preference to people in other areas over people of the Great Lakes area. In the enactment of legislation extending this recommendation to the Great Lakes, the Congress would break faith with the people of this area. Finally, adoption of the recommendation for the Great Lakes would completely disregard our foreign relations with Canada.

Mr. JOHNSON. At the outset of the report of the Hoover Commission, I had, I think, the same difficulty that the chairman expressed