Today we have potentially the best recreational sites in our United States; certainly the closest to the big centers of population. If we get the dams and lakes we are asking for, our people would make enough money in a relatively few years from the tourist industry to pay back our Government in income taxes the total amount expended for such dams and lakes, not even mentioning the income from the sale of power and the income from taxes from industry that would locate in our area.

Again let me say, I am not here begging-I am not a Socialist-I am here asking your assistance in helping us to put together the greatest combination known to industry-coal, water, and electric power. We have the coal; we have the water; and if this water can be stored we will have the power. With this combination our people can have prosperity.

We ask for your help that we might have the opportunity in eastern Kentucky.

Mr. JONES. You people in eastern Kentucky know how to state your case, don't you?

Mayor DANIEL. Well, we have sat up there and suffered long enough, and we are out fighting for it.

Mr. JONES. You make an excellent statement.

Mayor DANIEL. Thank you, sir.

Mr. JONES. And I am sure that everything you have said about the conditions in eastern Kentucky will be noted by the Congress. Mayor DANIEL. Gentlemen, during the war, when the Government was expending funds and building up industries throughout the Nation for the benefit of our war effort, eastern Kentucky did not realize anything. We have had nothing up there. While other sections of the country, it seems, have had more and more poured into their back door every year, we have had nothing. We have one of the finest regions for coal in the country. We have people up there who want to work, but they have had no assistance and it would be an impossibility for local capital to go out and to build these dams to provide this water storage that we need in order that we might sell our coal and have it available for other uses in the chemical industry. Mr. JONES. Are there any questions?

Mrs. GRIFFITHS. What is the ratio of unemployment in Corbin? Mayor DANIEL. Our last figure in the city of Corbin-men alonewas around 1 to 265, I think it was. Of course, Corbin is in the foothills of the Cumberland Mountains and Harlan, and the area producing the coal. During the war, when the Government was buying a lot of coal and coal was being sold at any price, we had an awful lot of small mines operating around Corbin, but today all of those mines are closed.

Mrs. GRIFFITHS. Percentagewise, what is the unemployment figure? Mayor DANIEL. I would not want to guess without really knowing, and I just do not know. We have had several figures on it prepared by our unemployment office that is located there, and it has fluctuated from time to time.

Mrs. GRIFFITHS. How many people do you have on relief now, do you know?

Mayor DANIEL. Those commodity lines must get up to around 600 or 700 every month when they are giving away commodities up there. I do not know what we would classify as relief right now, but we have

some more destitute cases to the east of us than we have right in Corbin. That is in the Harlan coalfields.

Mrs. GRIFFITHS. What is the population of Corbin?

Mayor DANIEL. Around 11,000.

Mrs. GRIFFITHS. You know, the really important thing is that you never hear of this unemployment unless you hear someone speak in Congress, or if you come into one of these regions.

Mayor DANIEL. I believe the Congress or the Government itself declared us a distressed area up there, and a labor surplus area, not too long ago last year or the year before last, offering companies tax writeoffs, that would have any kind of Government contracts, for locating in that area. Of course, we have had no locations of new industry there because we have no power for them, and no water supply or storage. We have the water, but no storage.

Mrs. GRIFFITHS. I do not recall seeing anything announced by the administration that there is this sort of thing happening there. Mayor DANIEL. Not later than last year we were classified as a distressed area.

Mrs. GRIFFITHS. We were too.

Mr. REUSS. Has that classification produced any relief?

Mayor DANIEL. Nothing at all.

Mr. REUSS. In Corbin?

Mayor DANIEL. Nothing.

Mr. REUSS. Has it created one new job?

Mayor DANIEL. Not that I know of. We have had no new industry. Mr. REUSS. I would like to commend the people of the upper valley for not just sitting around wringing their hands, but trying to work out the kind of constructive proposal which you have given us this afternoon.

Mr. LIPSCOMB. Have these dams which you are speaking of, sir, been authorized or surveyed?

Mayor DANIEL. They have been proposed by the Crops of Engineers, or have been under study for some several years. They have drawings on them, preliminary drawings I guess they might be called, but back in the thirties I think they made some preliminary locations of such dams. Our Upper Cumberland Development Association, which was recently formed, which Mr. Catron is president of, after we tried everything else we got on the idea of maybe trying to get a dam up there and some water there, because industry has gone into that area looking for locations, but we do not have the water or the power to offer them.

We contacted the Corps of Engineers and they gave us some information on what had been done on the upper Cumberland River. They have recommended the Laurel River Dam and Rockcastle River Dam, and a couple of dams on the South Fork.

Mr. LIPSCOMB. Do you think your area would qualify under recommendation 1 (c), or at least the first part of that, in the recommendations of the Hoover Commission?

Mayor DANIEL. I am not too familiar with the parts of that. What does it pertain to?

Mr. LIPSCOMB. Recommendation No. 1 (c) says:

That the Federal Government should assume responsibility when participation or initiative is necessary to further or safeguard the national interest or to accomplish broad national objectives, where projects, because of size or complexity

or potential multiple purposes or benefits, are beyond the means or the needs of local or private enterprise.

Mayor DANIEL. We would agree with that one 100 percent.
Mr. LIPSCOMB. Of course, it goes on to say also:

Under other circumstances the responsibility for development should be discharged by State or local governments, or by local organizations, or by private enterprise.

Then you would qualify, at least from what I have heard you say, under the first part of that.

Mayor DANIEL. Yes. We would try to qualify under that, and I don't see why we could not.

Mr. LIPSCOMB. Right this minute there is no doubt in your mind that you would qualify.

Mayor DANIEL. That is right, because we have a product up there of coal that certainly our Nation's economy is depending upon in large measure, and the new chemical industry that is growing so fast is using coal as a basic raw material, which would affect the economy of the country.

Mr. LIPSCOMB. Then you must also agree with the recommendation No. 1 that the Congress adopt a national water policy, on the following nine points, as they say in the report. Through the hearings I have attended of this subcommittee I am convinced in my own mind that Congress had better adopt a national water policy. It is possible that this committee may be able to help in determining how it is done. But you in your statement have asked us to use our influence to prevent the adoption of the Hoover Commission's recommendations. Someplace we might be able to find good recommendations within these overall recommendations of the Hoover Commission, so I do not know whether you wanted to tell us to use our influence not to adopt any of the recommendations.

Mayor DANIEL. There are certainly recommendations in there that would somebody would find a loophole to try not to help us, maybewhich I think they are trying to do. But the part pertaining to local governments or State governments becoming a partner in one of these partnership deals in financing a project such as this-why, we could not ever raise money in that amount and we could not become a part of it. We do not hope to.

Mr. LIPSCOMB. Of course, in your statement you talked about a modified form of partnership where you say that if the dams are built then you are sure that private utilities would come in and establish the powerplants. I believe that is in your statement here.

Mayor DANIEL. I believe they would over and above the original powerplant that was established at the dam. They would, in all probability, establish steam generating plants, which would give us an outlet for our coal. That is one of the reasons for us being here. We are trying to get a market for that coal.

Mr. LIPSCOMB. Does TVA buy your coal now?
Mayor DANIEL. No.

Mr. LIPSCOMB. Where do they get theirs from?

Mayor DANIEL. Most of that coal is coming out of western Kentucky. We are not shipping any coal to TVA today because our freight rates are prohibitive and they cannot compete with some of the people bringing coal in here; and certainly not on coal brought down on barges.

Mr. LIPSCOMB. Would the additional improvement of the waterways of the Cumberland River help your area?

Mayor DANIEL. As far as transportation is concerned?

Mr. LIPSCOMB. As far as transportation is concerned. Or, is that too far?

Mayor DANIEL. No. If we had a dam located on the Laurel River there is no reason why coal could not be barged out of there or over these other dams by conveyor belts, or such means as that. I knew there are now some small mines in Rockcastle County that are barging some coal into some of the smaller cities, rather than trying to haul it by rail freight just on that particular lake-Lake Cumberland.

Mr. LIPSCOMB. Do you know offhand the difference in the rate between the coal coming from western Kentucky and the coal being shipped

Mayor DANIEL. It amounts to about $1.25 a ton difference and we can't compete with it. If we had to meet the price they were shipping the coal for from western Kentucky down into the TVA area, our operators just could not keep their mines open with wages as they are today. It would be impossible for them to absorb that differential in the freight rates.

Mr. LIPSCOMB. But if user or toll charges were put on waterways. then in effect that may help your area?

Mayor DANIEL. I would not know about that.

Mr. LIPSCOMB. It would put you on a competing basis with an area that had waterways to their door, would it not?

Mayor DANIEL. If their freight rates were as high as ours it would put us on a competitive basis. That is true.

Mr. LIPSCOMB. There are all kinds of things involved in this question.

That is all I have, Mr. Chairman.

Mr. JONES. Mr. Mayor, you have said that you had your own generating plant at Corbin.

Mayor DANIEL. At one time. Yes, sir. It is idle now.

Mr. JONES. It is idle now?

Mayor DANIEL. Yes, sir.

Mr. JONES. Where do you get your power?

Mayor DANIEL. We are buying it from Kentucky Utilities, with the understanding that we can only use so much.

Mr. JONES. You mean there is a limitation on the amount of power you can acquire?

Mayor DANIEL. That is right. They are limited themselves as to how much they can produce up there with this one generating plant they have. I do not know whether they have limited themselves, but they are sitting there on the side of a small stream and they do not have the water to cool those generators with. I feel had they the water stored there, no doubt they would produce the power which would give us an excess in power so that we could attract industry. But if an industry comes to Corbin and says, "We have to have so many thousand kilowatts of electricity to start this plant," all we can say is, "I don't know where you are going to get it because it is not around here."

Mr. JONES. What are you paying for energy at the present time? Mayor DANIEL. One and a quarter cents a kilowatt. It will average about that.

Mr. JONES. What is the transmission distance to the nearest thermal plant?

Mayor DANIEL. About 60 miles.

Mr. JONES. Is that rate set by the Kentucky rate-making body? Mayor DANIEL. Supposedly, but that is one of the most complicated things I have ever seen in this contract they have, because they more or less have us over a barrel. We do not have any other place to get the electricity. They have a contract with our city that we are to have a flat rate, or a demand rate. Then there is a clause in the contract that if we use within 1 minute of the day 2,000 kilowatts and it should cut back, and the average for that day would be only 1,500, then we still pay for 2,000.

Mr. JONES. At the peaking period?

Mayor DANIEL. That is right. We have to pay for the peak of that day or that month, rather. They have a coal clause in there depending on their output of coal in their other plants, as to the average that it would cost to produce that number of kilowatts we use. We have to pay the same average they would have to pay any place else for it when they are buying coal for, I imagine, around $3 a ton up there. Mr. JONES. Thank you very much, Mr. Mayor.

Are there any further questions?

(No response.)

Mr. JONES. Now always the best for last. Mr. Braxton B. Carr, of Birmingham, president of the Warrior-Tombigbee Association.

I knew we would have to get an Alabamian in here before we could conclude this hearing. I am glad to have you, Braxton.

STATEMENT OF BRAXTON B. CARR, EXECUTIVE VICE PRESIDENT, WARRIOR-TOMBIGBEE DEVELOPMENT ASSOCIATION, AND MEMBER OF THE STEERING COMMITTEE OF THE NATIONAL WATERWAYS CONFERENCE

Mr. CARR. Thank you, Mr. Chairman. It is a pleasure to be here. I have four extra copies of my statement.

The chairman has just promoted me from executive vice president of the association and I would appreciate it if you would demote me, because the president is not paid and the executive vice president is. I am Braxton B. Carr, executive vice president of the WarriorTombigbee Development Association, a voluntary, nonprofit, educational association seeking development of the Warrior-Tombigbee River system in Alabama for navigation and allied benefits. I am also a member of the steering committee of the National Waterways Conference, which is also a nonprofit, voluntary organization whose purpose is to maintain the free use of the navigable waterways of the United States. I appear here today to represent both organizations and to present the views of both organizations specifically in opposition to recommendation No. 8 in the report made to Congress by the Commission on Organization of the Executive Branch of the Government on Water Resources and Power. This recommendation calls on the Congress to

authorize a user charge on inland waterways except for smaller pleasure craft, sufficient to cover maintenance and operation, and authorize the Interstate Commerce Commission to fix such charges.