perhaps, others. Rising freight costs, which more than anything else have hurt coal's competitive position with other fuels, impelled Pittsburgh Consolidated to adopt the pipeline project. That project and Cleveland Electric's move to build along the Ohio hold much promise for this region-a region rich in coal and blessed with rivers to haul it cheaply. In the next decade the eastern Ohio River may well become the site of several new powerplants, and also of new industries attracted by the power rates. BIERY EXHIBIT F [From the Cincinnati Times-Star, November 9, 1955] A VITAL MEETING A meeting of extreme importance to Cincinnati and the Ohio Valley takes place here Wednesday and Thursday when a House Subcommittee on Water Resources and Power holds hearings on the proposal to charge tolls for use of inland waterways navigation facilities. This subject springs from a recommendation of the Hoover Commission. That body, and its task force, obviously lacked understanding of the economy of this valley and the historical precedent for free river traffic. Since 1787, when free use of the Ohio and its tributaries was guaranteed forever by the Federal Government, the river has been open to all without any payment of tolls. It is largely because of this condition that Cincinnati and other river cities have grown and prospered. It is because of river commerce as it is now that many great industries have located in this valley. These industries pour into the Federal Treasury far more in taxes each year than tolls would ever raise. To discourage others like them from building in the Ohio Valley because of the higher transportation costs which tolls would impose, would be to rob the Treasury of millions which might otherwise swell its coffers. That is just one angle to the issue. There are many others. But overall is the damaging effect which the imposition of tolls would have on an economy that has become adjusted through the years to a system of transportation balanced between water, air, highway, and rail for the common good. Upsetting that adjustment could be harmful to the whole Nation. [From the Cincinnati Enquirer, November 9, 1955] OHIO VALLEY RIVAL TO NORTHWEST AS ALUMINUM CENTER OF NATION WASHINGTON, November 9.-Announcements of new plans for big expansion of aluminum production on upper reaches of the Ohio River are thrusting the Ohio Valley into rivalry with the Pacific Northwest as the aluminum center of the Nation. This fact became apparent here today with study of figures on the two areas. The Northwest is well ahead, but sponsors of the new programs believe that the same advantages which are winning these plants will win others in the future and that the valley may catch up. First and biggest in the valley is Alcoa in Tennessee with 145,000 tons of capacify at the end of 1953. Kaiser Aluminum came next with the first plant near the main stem of the Ohio on which it is spending $100 million at Ravenswood, W. Va. Capacity is 90,000 tons. Reynolds Metals has plans for 100,000ton plant which it expects to place in the valley. Yesterday, Olin Mathieson Corp. announced at New York plans for a 60,000ton plant at a cost of approximately $85 million in the Panhandle area of West Virginia. St. Joseph Lead Co. simultaneously said it proposes a 66,000-ton plant in the same area at a cost near that of Mathieson. The sum of these proposals with Alcoa's plant is 561,000 tons. The Pacific Northwest had 548.000 at the end of 1953. The Pacific, however, also has new construction and new plans since then. Anaconda Copper started a 60,000-ton aluminum plant in Montana in August. Harvey Machine Co. will build a $65 million plant in Oregon next year. 70818-56-pt. 87 The Wall Street Journal found that the key to plans of the Mathieson and St. Joe Lead to locate in the Ohio Valley "appears to be negotiations with utility firms for necessary large amounts of cheap electric power to be produced from coal." Cheap hydroelectric power has been the attraction in the Northwest, leading producers to ship alumina across the country to be made into pig, then back again for sale as finished products. In the center of negotiations for the 2 new plants for the Ohio Valley is Philip Sporn, president of American Gas & Electric Service Corp., New York, a holding company with 8 utilities in the valley. Both plants would consume large quantities of coal as fuel and both would use large blocks of electrical power, the Mathieson needs alone being estimated at more than a billion kilowatt-hours a year. This power in turn would be produced from coal consumption. It also would require new generating plants in which to produce it. (The following material was submitted by Hudson Biery :) Hon. ROBERT E. JONES, MIKCO GRAIN CO., Cairo, Ill., November 4, 1955. Chairman, Subcommittee on Water Resources and Power, Cincinnati, Ohio. DEAR SIR: The question of putting tolls on river traffic on our inland waterways has raised grave misgivings in my mind. We have recently spent some $200,000 on barge-loading facilities in Cairo for the prime purpose of enabling us to ship by barge and give our farmer customers higher prices for their grain. The farmer is caught in a squeeze now because of the low prices he receives for his products, and the high cost he pays for transportation and goods he buys. Any extra income he may receive is greatly needed. Everyone agrees that the mounting farm surpluses are a major problem in the farm picture. The best possible solution, according to many, is the selling of these surpluses abroad. If we can't sell them abroad, we will continue to have them as a threat to our domestic markets. One of the factors that would certainly help us move them is price, and the cheapest way to move them to our export ports is by barge. Transportation certainly plays a very important part in the price structure. Any saving in freight is passed on to the consumer and foreign buyer. Therefore, river freight certainly must be protected from tolls as everyone benefits in the removal of our farm surplus. Any toll structure on the rivers certainly will raise the cost of transportation. We strongly oppose any toll system on the rivers and sincerely hope your committee agrees. This will certainly be a hindrance in disposing of our farm surpluses. Sincerely yours, W. H. HASLAUER. JOINT EXECUTIVE COMMITTEE FOR THE IMPROVEMENT AND DEVELOPMENT OF THE PHILADELPHIA PORT AREA, Hon. ROBERT E. JONES, Chairman, House Special Subcommittee on Water Resources and Power, Cincinnati, Ohio. DEAR CONGRESSMAN JONES: The Joint Executive Committee for the Improvement and Development of the Philadelphia Port Area represents the 18 member organizations listed at the foot of this letterhead. This statement is filed in opposition to the levying of tolls or user charges as recommended in the water resources and power report to Congress (June 1955) of the Commission on Reorganization of the Executive Branch of the Government. The United States Government, through the Corps of Engineers, United States Army, and the United States Coast Guard, is responsible for the development, maintenance, and safety of the Nation's harbors and waterways. By precedent and longstanding tradition the United States has upheld its responsibility and by so doing has fostered and encouraged the free movement of commerce involved in both national and international trade. The economic benefits flowing from navigation improvements are utilized by all industry and commerce now existing and which will develop as a result of such improvements. Any tolls which would be imposed would have a negating influence upon these economic benefits. Tolls which would be paid by private shipping could not possibly be recovered on an equitable competitive basis. Since waterways are both national and international in character, it is only through our system of Federal taxation, rendered on a national base, that navigation improvements can be equitably financed. And, of course, improved waterways are vitally important to our national defense and are properly to be provided by the Federal Government. We strongly endorse the statement made by the Assistant Chief in charge of civil works for the Corps of Engineers in an address to the American Association of Port Authorities in San Francisco on October 25, 1954. "The economic factors involved are complex. There are places where the investment cost of an improvement for the benefit of navigation is so low and traffic is so heavy that it would require an insignificant charge indeed to repay the Government's expenditures. In the same general vicinity there may be other communities whose navigational improvement works cost more, and whose traffic is not as heavy, and whose businessmen, shippers and carriers consequently would have to pay perhaps many times as great a charge. This would make a mockery of free competition between the two areas." During the 2d session of the 82d Congress Senate bill 2743 was introduced and referred to the Committee on Interstate and Foreign Commerce. The bill was designed to authorize and direct the Interstate Commerce Commission to determine and prescribe user charges to be imposed for the commercial transportation purposes of inland waterways constructed or improved at the expense of the United States, and for other purposes. We are told that this bill met with an unprecedented wave of resistance and was "put down." At that time it was pointed out that the bill was unconstitutional because: 1. The Federal Government cannot exact tolls on State-owned property and the rivers are State property. 2. As a tax the bill would be unconstitutional because it would not be geographically uniform. 3. The bill would be a violation of the faith and integrity of the United States since most of the territorial ordinances under which such territories became States were accorded a "forever freedom" for use of rivers. River and harbor development is a prerogative of the Federal Government and the timely exercise of this prerogative in the past has been largely responsible for the growth and prosperity of our country. The Joint Executive Committee for the Improvement and Development of the Philadelphia Port Area views tolls or user charges as being detrimental to the economic transportation structure and discriminatory to waterway users. Respectfully submitted. HUDSON BIERY, Executive Vice President, Ohio Valley Improvement Association, Inc. H. G. SCHAD, Chairman. Room 608, Federal Post Office Building, Cincinnati. The board of directors of this association in meeting today express their opposition to the charging of tolls for use of inland waterways. HARRY G. KENNEDY, Executive Secretary, Kanawha Coal Operators' Association. THE PITTSBURGH COAL EXCHANGE, In opposition to tolls on navigable waterways. Washington, D. C. GENTLEMEN: In addition to being completely out of smypathy with the longstanding tradition of this Nation that the rivers shall be forever free highways, the imposition of tolls on the locks would be both unfair and unworkable. Indeed, it might well destroy the very purpose for which it is designed. There is little doubt that, if tolls were imposed to the extent that they should amortize the locks and dams, traffic would decrease to the point where the locks and dams would never be paid for. In such a highly competitive industry tolls would surely wipe out the smallboat operators who could not cope with the owners of large and powerful towboats capable of moving enormous tonnages in one unit. Tolls might well mean the difference between shipping by water and not shipping at all. For example, there is the heaviest concentration of traffic in the Nation on the Ohio River in the Pittsburgh district. More than 75 percent of this traffic moves only about 58 miles from Pittsburgh. Most of the tonnage consists of raw materials. On the other hand, the finished products of the steel industry are in the so-called "long haul" trade and this tonnage moves all the way down the Ohio and Mississippi Rivers. It would be a serious handicap for this traffic to bear the burden of tolls on the forty-odd locks and dams which are old and antiquated, while the heavier traffic moves only a short distance through modern structures. The only way the southern and western markets can be reached at anything near a competitive price is by water. Tolls would destroy these markets. This would disrupt the whole economic pattern of the country, change the market areas, and dislocate labor supply over the entire country. Navigation should not be required to foot the bill for these structures when so many other beneficiaries are involved. The only special advantage to traffic is the locks themselves. The multi-billion-dollar industrial development in the river valleys could not have been possible without dams across the river to , assure stable pools and an ample supply of water for industrial use. We submit that, were it not for assured water supply for the steel industry, powerplants, chemical plants, and municipal use, there would be no river traffic to worry about. There would be no need for rail and truck terminals on the riverbanks. When it is realized that there are many individual plants along the rivers which use more water daily than the great metropolis of Pittsburgh, it seems grossly unfair that the barge lines which serve this industry and are wholly dependent upon it for their very existence should be required to pay for those benefits. It is our considered opinion that payment for these structures must come from taxes derived by methods already set up in the governmental tax structure. They could not be put to better use. The locks and dams have paid for themselves many times over in benefits to industry and the general public. They are invaluable to the national defense. The industries along the navigable waterways more than justify the spending of national funds for continued waterways development. To hinder the growth and prosperity of the very heart of America by imposition of tolls on the rivers would be foolish economy. Sincerely yours, DAVID MATHEWS, Jr., STATEMENT OF WALTER C. BECKJORD, CINCINNATI GAS AND ELECTRIC CO., CINCINNATI, OHIO The entire economy of this region has been adjusted to free movement of commerce on the Ohio River over the period of some 150 years, and the imposition of tolls at this time would be devastating in dislocating that economy. In the case of the electric service supply companies of the region, the inposition of toll charges on the Ohio River would have the effect of increaking cost of electric service to industry, business, and residential users. All steam electric generating plants along the river are coal burning and receive their coal by barge. Coal from various fields is moved up and down the river to a great number of generating plants. These plants produce large quantities of power used by industry, including the two large Atomic Energy Commission installations at Portsmouth and Paducah. If toll charges are put into effect on the Ohio River, the charges so imposed would be passed along to our company in the increase in cost of coal delivered to our three generating stations. This increase in cost would necessarily be passed on to the users of our service and would increase the cost of electric service to more than 375,000 customers in the 2,600 square miles of territory served in Ohio and Kentucky. The present consumption of coal by the Cincinnati Gas & Electric Co. is approximately 2 million tons per year, all of which is transported on the Ohio River. Therefore, any toll charge imposed would add substantially to the cost of operation and thereby increase the electric rates for light and power in our service area. Our most modern electric generating station of 350,000 kilowatts capability which was put into service in 1952, is supplied with coal entirely by river because there are no railroad facilities available and it presently consumes over 1 million tons of coal per year. By late 1957 an additional 175,000kilowatt unit will be in operation at this station-which will increase the tonnage of coal required by 300,000 tons per year-making a total of 1,300,000 tons. Low-cost river transportation was the deciding factor in the location of this plant. Normally the electric load doubles every 10 years and therefore by 1965 consumption of coal would be on the order of 5 million tons per year and if the load increases more rapidly then the consumption would be doubled in less than 10 years. STATEMENT OF LOWELL L. FRENCH, PRESIDENT, UNION BARGE CORP., PITTSBURGH, PA. My name is Lowell L. French and I am president of the Union Barge Line Corp., a certificated common carrier of freight operating on the navigable waterways comprising the Mississippi River system. My business address is room 1009, Dravo Building, Fifth and Liberty Avenues, Pittsburgh, Pa. Since its inception, the United States Government has assumed an obligation to develop and maintain public highways throughout the Nation for travel and transportation purposes. Long-established governmental policies clearly identify the inland waterways as a part of this highway system and, in unequivocal language, declare that such waterways shall always be available to the public without the imposition of a user charge of any nature. The initial declaration of policy is to be found in article 4 of the Ordinance of 1787 for the Government of the Northwest Territory, it being stated that "The navigable waterways leading into the Mississippi and St. Lawrence, and the carrying places between the same, shall be common highways, and forever free, as well to the inhabitants of the said territory as to the citizens of the United States, and those of any other States that may be admitted into the confederacy, without any tax, impost or duty therefor." As further clarification of its views with respect to the use of the waterways, Congress included in the River and Harbor Act of August 2, 1882, a provision which still remains in full force and effect, reading as follows: "No tolls or operating charges whatever shall be levied upon or collected from any vessel, dredge, or other water craft for passing through any lock, canal, canalized river, or other work for the use and benefit of navigation, now belonging to the United States or that may be hereafter acquired or constructed; * * *." Obviously, the latter provision was incorporated into law in order to give specific assurance that not only waterways in their natural state but also those improved by manmade structures or otherwise were to be exempted from user charges. Subsequently many other congressional acts have decreed that the navigable inland waterways of this country are to be maintained as public highways for use by all of the people at no charge and with freedom of access and nondiscriminatory treatment. During the intervening years, inland waterway transportation has played a major role in the development of the interior part of our country, bestowing benefits and advantages which can only be associated with a maritime economy. Settlement and industrialization have gradually accelerated until within the last few years when the rush to establish riverside industrial facilities has assumed almost fantastic proportions. This recent industrial expansion represents the investment of billions of dollars, with product diversification embracing practically all the needs of this great Nation. River transportation of the packet boat era served to link the newly established communities throughout the midcontinental area and provided the impetus for the widespread development which occurred during the first half of the 19th century. Meantime, railroads had already made their appearance, first acting as feeder lines to the rivers, but a few years later being extended to parallel the navigable streams in order to capture the waterborne traffic. Being unregulated at the time, the railroads began a ruthless assault against the packet-boat industry, drasticly cutting rates and using every other conceivable means to eliminate the competition. Gradually this was accomplished, so that by the end of the century, river service had dwindled to such an extent that only a few operations remained, generally serving the local trade in regions |