Mr. HUNDLEY. The objective of Citizens for TVA right now is the TVA self-financing plan. Mr. LIPSCOMB. The bill that is presently before Congress? Mr. HUNDLEY. We are interested in the Citizens supporting this bill. Mr. LIPSCOMB. Does that bill in any way concur or fit in with the Hoover Commission recommendations? Mr. HUNDLEY. I am not prepared to answer that, sir. Mr. LIPSCOMB. That is all. Mr. HUNDLEY. We are for the TVA self-financing plan as originally prepared by the TVA staff. Mr. LIPSCOMB. Is that the bill that is presently before Congress or has it been amended? Mr. HUNDLEY. That is the Kerr bill and in the House it is the DavisJones bill, if I am correct, sir. Mr. LIPSCOMB. Are the Citizens for TVA for giving full control of TVA to TVA, or does the bill retain the Presidential and congressional control? Mr. HUNDLEY. It still retains the congressional control. Mr. LIPSCOMB. Under that bill do you propose to pay interest on the investment? Mr. HUNDLEY. Under this bill there are several financing plans set out. It does not preclude the possibility of congressional appropriations for TVA in the case of war or disaster. The Congress, I think, would want to retain the right to maintain this power supply for arsenal purposes. There are so many huge Government defense installations here which are using over half of all the TVA power right now that TVA generates. The Atomic Energy Commission at Ŏak Ridge, and the AEDC around Chattanooga are there, and AEDC's wind-tunnel installation at Tullahoma, and many others, like shellloading plants and TNT plants, and others all over this area. It is a veritable arsenal. Mr. LIPSCOMB. Do the Federal installations pay for the power they use? Mr. HUNDLEY. Yes, sir. They do. They pay TVA. Mr. LIPSCOMB. Do you happen to know the rate that the Federal Government pays? Mr. HUNDLEY. No, sir. I do not know that. I know it is at a great saving to the taxpayers over the private power rates on private power sold to the same installations. Mr. LIPSCOMB. Do you feel that there are any costs involved in things that the Government performs for TVA that TVA should reimburse the Government for? Mr. HUNDLEY. I am not prepared to answer that, I am afraid. Mr. LIPSCOMB. Is Citizens for TVA, or are you as secretary of the Citizens for TVA, aware of the recommendation by the General Accounting Office which in effect says that the Tennessee Valley Authority should pay interest on the investment, but that the repayment schedule should be revised? Are you familiar with that recommendation which has been made over a period of years? Mr. HUNDLEY. I believe I have noticed it in the paper, but I do not have any authentic record of it. No, sir. Mr. JONES. Do you mean Comptroller General Campbell's letter commenting on the Kerr bill? Mr. LIPSCOMB. No. For the past several year the General Accounting Office has included in its audit reports and they are required under the law to audit the Tennessee Valley Authority-they have included in their report one single recommendation which is that the repayment schedule which is now set up on a 40-year plan should be revised, or changed, or modified, and that 3-percent interest should be paid. At the same time they have also complimented the Tennessee Valley Authority on their accounting records. But that is the only recommendation they have made. Mr. JONES. Off the record. (Discussion off the record.) Mr. HUNDLEY. They would sell their bonds and finance it pretty much as others do in private power. Mr. LIPSCOMB. You mean under the Kerr bill? Mr. HUNDLEY. Yes, sir; since you mentioned records there, I might state that the earlier Hoover Commission jumped on TVA again and came down and examined their records thoroughly, and they found them to be a model. You mentioned that TVA's records are being complimented by Comptroller General Campbell. The earlier Hoover Commission found the same to be true. Their records were described as being a model. Mr. LIPSCOMB. I think TVA should be complimented on keeping that kind of records. I think it is important that they do so. I wish other Government corporations would do likewise. Mr. HUNDLEY. Yes, sir. Mr. LIPSCOMB. Do the Citizens for TVA go to Washington to propose legislation or oppose legislation? Mr. HUNDLEY. Only as citizens. Some of our people like Mayor Dempster. None of the paid staff have testified. Mayor Dempster has testified as president of Citizens for TVA, before some congressional committees on TVA appropriations. Mr. LIPSCOMB. It is not necessary for you to be registered under the Lobbying Act? Mr. HUNDLEY. We do not think so; no, sir. We do no more lobbying activities than any citizen would do. That is all that is carried out. Mr. LIPSCOMB. That is all I have, Mr. Chairman. Mr. JONES. Thank you very much, Mr. Hundley. Mr. Charles Everhart, president of the Cumberland Valley Association. How you are, Mr. Everhart? Will you have a seat, please? Do you have a prepared statement? STATEMENT OF C. M. EVERHART, PRESIDENT, CUMBERLAND VALLEY ASSOCIATION, AND EXECUTIVE VICE PRESIDENT, CUMBERLAND RIVER SAND & GRAVEL CO. Mr. EVERHART. Yes, sir; I do. Mr. Chairman, I would like to add my word of welcome and thanks to the committee for coming to Nashville and giving us an opportunity to appear. Shall I proceed, Mr. Chairman? Mr. JONES. Yes, sir, Mr. Everhart. You go right ahead. Mr. EVERHART. My name is C. M. Everhart of Nashville, Tenn. I am president of the Cumberland Valley Association, a nonprofit organization composed of citizens from all walks of life living throughout the 600-mile length of the Cumberland River Valley, and whose purpose is the full economic development of the Cumberland River. I am also executive vice president of the Cumberland River Sand & Gravel Co., and also the Cumberland & Ohio Co., a small company engaged in commercial towing on the Cumberland River. I appear before this distinguished committee with deep and serious concern over the reports that the Water Resources Task Force of the Hoover Commission and the Cabinet Committee on Transportation have included and will include in their final recommendations to the President and Congress the imposition of tolls or charges on commercial users of the inland waterways, designed to recover costs of maintaining and operating improvements in aids to navigation, and possibly the amortization of investment and interest thereon. There are a great many witnesses here who are more qualified to speak on this than I am, so I will confine my remarks particularly to that phase of the report. Like most other navigable inland streams, the commercial use of the Cumberland River "died a slow death" during the span of years between the two World Wars. The old steamboat, with hazardous conditions of navigation, was completely inadequate to compete with highly improved land transportation techniques. With the advent of the light, improved marine diesel engine and fast towboat and barge design, coupled with the transportation experience of World War II, river transportation experienced a rebirth; and shippers and receivers of bulk raw materials and finished goods found that low-cost water transportation could offer them advantages of industrial expansion not otherwise possible, and in many cases not adaptable to their needs by other forms of transportation. Consequently, in the short span of time between World War II and the present time, there has developed along the banks of our inland waterways a gigantic new concentration of industry, representing tens of billions of dollars in investments and bringing a new prosperity and higher standards of living to millions of people. To keep pace with this great development, others have invested millions of dollars in modern river transportation equipment, riverside terminals and other facilities to serve this new economic giant. It is no mere coincidence that this decade of amazing development has proved highly beneficial to all segments of the economy, including other forms of transportation. In 1953 and 1954, nine multimilliondollar railroad yard improvement projects were located on the banks of inland waterways. Unfortunately, the Cumberland River has not quite kept pace with some of the other navigable streams in this development program. Composed of a system of small, obsolete locks and dams constructed at the turn of the century, and completely inadequate to accommodate modern river equipment, commerce on the Cumberland does not reflect some of the phenomenal growth figures evident on other streams. However, with all of these difficulties, and the obstacles to modern equipment, tonnage has increased at an average annual rate of 19 percent per year for the last 10 years. With improved navigation facilities now under construction and proposed, new industry is now making its way into the Cumberland Valley; and the area is now embarked on an era of unlimited industrial expansion. Should the recommendations for tolls be enacted, they will sound the death knell for this program. The development heretofore described has been undertaken on a long-standing enunciation of policy by the Federal Government as enacted in the ordinance of 1787, and reenacted by the First Congress, that: The navigable waters 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 other States that may be admitted into the confederacy, without any tax, impost, or duty therefor. This pledge of the Government to its people has been reenacted time and time again in acts admitting new States to the Union, and again in the Rivers and Harbors Acts of 1882, 1884 and 1909. I think this statement by the English novelist Bulwer is particularly appropriate at this time, and I quote it: Strike from mankind the principle of faith, and men would have no more history than a flock of sheep. And so, the faith of man in a 175-year-old policy of their Government has formed one of the cornerstones of the magnificent program of development and expansion along our inland waterways. Aside from the moral aspects of breaking a longstanding pledge of the Government to its citizens, such action would result in disastrous material consequences. I have no hesitancy in stating that it would bring about a speedy end to the movement of commercial traffic on the Cumberland River. Estimates on the Ohio River by the Corps of Engineers reveal that transportation costs would have to be increased as much as 50 percent to recover the costs of operation and maintenance of navigation aids on that stream. I do not know how much more it would mean if they would try to recover the capital investment and amortization and interest on that investment. Practically all interstate traffic now moving on the Cumberland also moves over the Ohio. In addition-and assuming that present traffic on the Cumberland would continue and certainly it would not the recovery of operation and maintenance costs on the 5 obsolete locks and 1 new one located between Nashville and the Ohio River would result in a 32-percent increase in present transportation costs. I would like to say here that particular percentage is calculated from the total operating and maintenance costs of the navigation aids downriver as against the present tonnage figures, and applied back to present rate costs of the transportation from the Ohio to Nashville. Petroleum products, now comprising one of the largest volumes on the Cumberland, would be forced to pipelines or other forms of transportation. Sand and gravel now moving by barge into a highly competitive market would have about 25 cents per ton added to its cost in a market where its competitive wholesale price is 75 cents to $1 per ton. At least two companies, including one of our own, would be forced out of business under such conditions. The inevitable result would be to force traffic from the river. With your permission I would like to stop at this time and deliver to the committee a letter from Mr. Harry Dyer, president of the Nash ville Bridge Co., who was very sorry he was called out of town, but was certainly interested to have this letter put in. Mr. JONES. Suppose we put it in at the conclusion of your statement? Mr. EVERHART. Fine. It bears very much on the subject in regard to his own company. On that small part which would remain, tolls would have to be further increased to recover costs, which action would eventually dry up all waterborne traffic. Railroad rates, which now reflect water competition, and on those commodities not adaptable to any other form of transportation, would then be increased; and the final result would be a progressive increase in transportation costs. There is now pending before the Interstate Commerce Commission a petition for merger of the two main-line railroads serving this area. Since traffic now moving by river is unadaptable to forms of transportation other than railroad, many industries would be left at the mercy of monopolistic ratemaking. There would also occur, then, a drastic reduction in the value and usefulness of large Federal investments in waterways. Such a series of certainties could mean little else than a general upheaval of the general economy of the region, dislocation of industry, unemployment, and a retarding of economic growth and development. We would call attention to the fact that, beyond the improvements to inland waterways, vast sums of Federal funds have been expended in the harbor improvements along our coasts and the Great Lakes. Is it proposed that user charges be levied against our oceangoing commerce using these facilities? The sixth clause of section 9 of article I of the Constitution provides that: No preference shall be given by any regulation of commerce or revenue to the ports of one State over those of another; nor shall any vessels bound to or from one State be obliged to enter, clear, or pay duties to another. We do not believe that river tolls, under this provision of the Constitution, could be levied against traffic moving to the port of Nashville unless similar tolls were exacted from ships entering the port of Norfolk, Va., San Francisco, Calif., or other ports on our coasts or Great Lakes. If similar tolls were levied against traffic moving to coastal ports, could not we reasonably expect other nations to retaliate against American ships entering their harbors, thus bringing about international trade complications of a serious nature? It is also noted that the task force, in making its recommendations, further suggested that Congress authorize the Interstate Commerce Commission to establish and fix such charges or tolls. It is submitted that the Interstate Commerce Commission now has more than it can do in the regulation of the complex system of rates and charges built up by our various transportation systems. At the same time, a great percentage of waterborne bulk commodities are exempt from regulation by the Commission. On the one hand, the Commission would have to relate transportation cost data on many commodities not now under its jurisdiction, and, on the other, bring under its surveillance all of the mass of cost and operating data pertaining to a portion of facilities now under other agencies of the Governmentsuch as the Corps of Engineers-in order to relate them into some kind of equitable schedule. Such an absurd situation could only result in the establishment of a bureaucratic monstrosity which would |