Mr. KING. It could have been.

My statement will be short for I have no desire to burden the record with repetition of the fine presentations already made or to be made during the course of this subcommittee's hearings.

Mr. Chester Thompson, president, American Waterways Operators, Inc., very ably presented the case in opposition to tolls in his statement of June 14, 1954, before the Task Force on Water Resources and Power in New York. Excellent statements have been presented to this subcommittee by Mr. William J. Hull, chairman of the legislative committee of the Ohio Valley Improvement Association, and by the Honorable Keen Johnson, former Governor of Kentucky and now a vice president of Reynolds Metals Co.

It has been pointed out by nearly every opposition witness that the United States long ago made a compact with its citizens in which it declared our inland waterways to be common highways and forever free to our inhabitants without any tax, impost, or duty therefor; that having made that solemn pact, it should not now desert those who have invested immense sums in our industrial and agricultural machine along our inland rivers, by voiding that compact and taxing by tolls that which it promised its citizens would remain free of levy. But important as that may be-probably more long reachingly important than any other phase of the matter-there are other serious considerations.

The proposed tolls are brought forward under the guise of a method of reimbursing the Government for its navigation improvement expenditures. Actually, they are the brain child of our railroads and a part of their program intending the ultimate destruction of the inland water-carrier industry. This is borne out by the fact that the railroads themselves oppose tolls on those navigable waters which they consider noncompetitive, and on many of which they operate themselves, even though those waters carry two-thirds of our waterborne commerce and the inland carriers against which the toll movement is directed, carry only one-third.

The other part of the railroads' program is the amendment of the Interstate Commerce Act in accordance with the recommendation of the Cabinet Committee on Transport Policy and Organization. With tolls to increase our costs and no long- and short-haul clause of the Interstate Commerce Act to prevent selective rate cutting by the railroads without regard for the inland rail-rate adjustment, our days would indeed be numbered, and the number would be mighty small. We saw that happen to the packet boats. We cannot afford to have it happen to our less romantic but economically much more important barge-line industry of today.

Our railroad friends proceed on the theory that all inland traffic is theirs by some peculiar right, and that all other forms of inland transportation are bandit carriers stealing traffic from the rails. They persist in this view even though they are unable to carry all the tonnage now being offered them, and even though their 1952 ton-mileage was nearly double that for 1939. They say, "Yes, but our percentage of the total was not as great in 1952." They choose to ignore the fact that much of 1952's more than double 1939's total inland ton-mileage was created because of bus and the trucklines and the pipelines. Necessarily their percentage of the whole would be a little less, but their total is much more, and it is that increasing total that brings them today's

unprecedented wealth. Instead of attempting to destroy their competitors, they should be thankful for them and recognize them as necessary parts of an integrated and successful whole.

And now let us look briefly at the source of the tolls, should they be exacted.

Much of the bargelines' tonnage is coal. Coal goes primarily to great generating plants for the production of power. That power reaches plants and individuals and atomic-energy installations and other Government research centers throughout our land. It is from them that our tolls would have to come. And they are our taxpayers or supported by our taxpayers. So our taxpayers, having improved our channels, would be forced to buy those improvements from themselves.

In our Tennessee Valley, the Government, through the TVA, would be the largest tollpayer because the TVA's coal is nearly four-sevenths of the Tennessee's traffic. Again, the taxpayer buying what he already

owns.

Another large segment of barge traffic is grain. Grain is a product of our subsidized farming industry. Tolls on grain would reach the farmer and through him our farm subsidy, and through the subsidy the taxpayer again. Or if it stopped with an unsubsidized farmerstill the taxpayer.

We could go on at length, but this should suffice. No matter what we call it-toll or user charge or something else it is a bill to the taxpayer for what he already owns.

Thank you very much.

Mr. JONES. Thank you very much, Mr. King.
Are there any questions?

(No response.)

Mr. JONES. Thank you very much, Mr. King.

Mr. Alex Radin, general manager of the American Public Power Association.

Alex, we are always glad to see you because I know you have given this subject a great deal of thought and concern.

STATEMENT OF ALEX RADIN, GENERAL MANAGER, AMERICAN PUBLIC POWER ASSOCIATION

Mr. RADIN. Thank you very much, Mr. Jones. It is a pleasure to be before this committee.

My name is Alex Radin. I am general manager of the American Public Power Association, a national trade organization which has offices at 1757 K Street, NW., Washington, D. C.

The American Public Power Association represents more than 800 local publicly owned electric utilities in 40 States and Puerto Rico. Membership of the association consists primarily of municipally owned electric systems, but also includes public utility districts, State and county-owned electric utilities, and rural electric cooperatives. A large number of the member systems of this association purchase power at wholesale from various Federal agencies, and therefore we have a direct interest in the recommendations of the Hoover Commission with regard to water resources and power.

So that you might have a more complete picture of the characteristics of size, sales to consumers, etc., of the privately owned power

companies and the local public power systems represented by our association, I have attached to my statement four tables showing comparisons of certain characteristics of these utilities. The statistics cover the class A and B utilities only (those with gross annual electric revenues in excess of $250,000) and are taken from the most recent comparable reports of the Federal Power Commission.

The policies which our association advocates with regard to water resources and power development were presented in a statement which R. L. Schacht, at that time president of the American Public Power Association, presented in New York City on June 14, 1954.

Mr. JONES. The president of the organization at the present time is Mr. William Hooper.

Mr. RADIN. That is correct.

Mr. JONES. Manager of the Sheffield Municipal Electric Depart

ment.

Mr. RADIN. That is correct.

Mr. Schacht presented that statement last year, when he was president of the association, before the Water Resources and Power Task Force of the Commission on Organization of the Executive Branch of the Government (Hoover Commission). Copies of this statement are available to your subcommittee, should you wish to incorporate them in the transcript of this hearing.

Mr. JONES. Without objection it will not be incorporated in the record, but a reference to the page and volume of the testimony before the task force will be made here.

Mr. RADIN. Fine. Thank you, sir.

(Mr. Schacht's statement appears commencing at p. 507 of the transcript of proceedings of the afternoon session of June 14, 1954, of the task force held at New York City, N. Y.)

Mr. JONES. You may proceed, Mr. Radin.

Mr. RADIN. At the outset, I would like to take this occasion to compliment your chairman and your committee for the excellent services you are rendering in holding hearings on the Hoover Commission's Report on Water Resources and Power. If carried into law, the Commission's recommendations could reverse the course which we have learned to chart after more than 50 years' experiencee in the development of our natural resources. The Commission's recommendations could open the way to the type of natural resource exploitation which our Government, after hard and costly lessons, sought to stop many years ago.

May I say, too, that I believe that this hearing at Muscle Shoals is particularly appropriate. For Muscle Shoals is far more than the site of a Federal dam and TVA fertilizer and other chemical processing operations. Muscle Shoals is an important landmark in the history of this Nation's resource development. Muscle Shoals provides, in capsule form, a dramatic story symbolizing and highlighting the many lessons we have learned in the long struggle for a national policy providing for comprehensive, responsible development of our Nation's water and power resources.

Because of the significance of Muscle Shoals in the history of our water and power resource policies, I would like to take a few minutes at the outset to recount for your subcommittee some of the events which led up to the developments here. Althought I am sure that this story needs no retelling for the chairman of your subcommittee.

who is a native of this area, I believe this history provides a frame of reference against which we should consider the recommendations of the Hoover Commission.

Mr Chairman, I realize this history I am going to give on Muscle Shoals, although not terribly long, is still somewhat extensive, but I think it is most worthwhile and most pertinent, because we cannot understand our present policies, or chart the course of the future, unless we know and are familiar with what has happened in the past and why and how these developments have occurred. So I would like to go ahead and read this at this time.

Mr. JONES. Very well, Mr. Radin.

Mr. RADIN. Muscle Shoals Development Urged As Early As 1824. Muscle Shoals was suggested as the location of a river improvement program as early as 1824 by Secretary of War John C. Calhoun in a report which President Monroe forwarded to the Congress. The recommendation came shortly after Chief Justice Marshall of the United States Supreme Court, in his famous decision in the case of Gibbons v. Ogden, established the exclusive control of the National Government over interstate navigation.

Muscle Shoals was recognized as a potential Federal development again in 1828, when Congress made a grant of 400,000 acres of land to the State of Alabama for the expressed purpose of encouraging the State to use the proceeds from sale of the land for improvement of the Tennessee River at Muscle Shoals, a stretch which divided the river into two navigable sections. A canal was built and completed by the State in 1836, but it was abandoned shortly thereafter as a failure.

Early interest in Muscle Shoals, of course, was centered upon the possibility of improving navigation on the Tennessee. Direct Federal work on the river was conducted sporadically between 1852 and 1890, when new canals around Elk River Shoals and Muscle Shoals were completed.

After the birth of the electric industry around 1880, Muscle Shoals ceased to be merely an obstruction to river traffic and began to be recognized as a valuable source of hydroelectric energy.

Ownership of this stretch of the Tennessee almost was lost to the American people twice at the turn of the century. In 1899, Congress passed a bill to permit the Muscle Shoals Power Co. to build a power station or stations on the river, with a proviso that such stations should not interfere with navigation. The question of how much compensation the company should give the Government could not be resolved and the company failed to start construction within the time alotted in the bill.

PRESIDENT THEODORE ROOSEVELT OPPOSES GIVEAWAY OF

"VALUABLE RIGHTS"

A subsequent bill, to permit N. F. Thompson & Associates to build a dam and powerplant at Muscle Shoals, was passed by Congress, but ran into a Presidential veto of historical importance. In his veto message (March 1903), President Theodore Roosevelt declared, in part:

I think it is desirable * * * that a general policy appropriate to the new conditions caused by the advance in electrical science should be adopted under

which these valuable rights will not be practically given away, but will be disposed of after full competition in such a way as shall best conserve the public interest.

The more recent history of Muscle Shoals is, of course, well known. However, it seems to me that there is value in retracing some of the struggles which led to the development of this great resource as a cornerstone of TVA.

The "great debate" of the post-World War I years concerned the disposition of 2 nitrate plants, a 60,000-kilowatt steam-electric generating station and Wilson Dam, started during the war for production of nitrates for munitions.

A summary of legislation affecting Muscle Shoals shows that from July 1921 to May 1933 there were 138 bills introduced in Congress relating to the disposition of this valuable Government property.

In 1921 Henry Ford proposed to pay $5 million in cash for the Muscle Shoals nitrate plants and to lease and complete construction of Wilson and Wheeler Dams with Government funds, on which he would pay 4 percent interest.

Mr. Ford withdrew his offer in 1924, after the Senate Committee on Agriculture and Forestry, headed by Senator George Norris, of Nebraska, released a report objecting to the offer on grounds that it was not a good financial deal for the Government and that it violated the Nation's conservation principles. In conclusion, the committee called the proposed sale to Mr. Ford the greatest gift ever bestowed upon mortal man since salvation was made free to the human race.

Other offers were made by chemical and power companies, but not given serious consideration by Congress. Senator Norris, meanwhile, introduced a series of bills calling for operation of Muscle Shoals by the Federal Government. The fifth such bill was passed by Congress in 1928, but was pocket-vetoed by President Coolidge.

PRESIDENT HOOVER VETOES MUSCLE SHOALS BILL

A compromise bill, containing the power features of the Norris bill, but permitting the lease of the fertilizer plants, was passed by Congress in 1931, only to be vetoed by President Hoover. In his veto message, referring to public ownership of utilities, President Hoover declared:

That is not liberalism, it is degeneration.

President Hoover pointed out that the Government could sell Muscle Shoals power only by robbing the private utilities of their customers and that the power project would inevitably operate at a loss. The veto was sustained by the Senate, 34 to 49.

In January 1933, President Franklin D. Roosevelt visited the Muscle Shoals area and in a subsequent speech at Montgomery, Ala., he declared that

Muscle Shoals gives us the opportunity to accomplish a great purpose for the people of many States and, indeed, for the whole Union. Because there we have an opportunity of setting an example of planning, not just for ourselves but for generations to come, tying in industry and agriculture and forestry and flood prevention, tying them all into a unified whole over a distance of a thousand miles so that we can afford better opportunities and better places for living for millions of yet unborn in the days to come.