including Federal, would lose money, and plenty of it. The privately owned lines would then be forced to suspend or discontinue their operations on these rivers, inasmuch as the United States Government has or can get more money to lose than can private enterprise. Accordingly, such action would give the Federal Barge Lines a monopoly on the Tennessee and Cumberland Rivers.

Most certainly it is inconceivable that the Congress of the United States desires to drive private operators away, in order to give an agency of the Government all the available business. Yet that is exactly what will happen if the HillKefauver-Sparkman amendment to S. 211 is adopted.

What about the actual tonnage on these rivers? According to the Tennessee Valley Authority, the total tonnage on the Tennessee River for the calendar year 1947 was 2,792,427 net tons. More than two-thirds of this tonnage was sand and gravel, amounting to 1,836,099 tons. Sand and gravel always constitute a local movement, as that commodity never moves any great distances; it is rarely transported by for-hire barge lines, but by producers in their own special equipment. It is doubtful that the Federal Barge Lines, in its present extensive operations, transports more than 1,000 tons of sand and gravel a year. According to the TVA, the tonnage on the Tennessee River increased to 3,044,000 tons in 1948, and sand and gravel still constituted nearly two-thirds of that tonnage and traffic.

In 1949 four commodities, other than sand and gravel, constituted the principal tonnage on the Tennessee River. They were: Coal and coke, 468,000 tons; forest products, mostly railroad ties, 38,900 tons; grain, 70,700 tons; and petroleum products, 483,200 tons. That was all the water traffic available on that river last year, and every ton of it was transported by private enterprise in the barge-line business.

According to the Army engineers, the total traffic on the Cumberland River in 1947 was 1,139,033 tons, 530,000 tons, or nearly one-half of which were sand and gravel; 552,000 tons, petroleum products; and 22,500 tons sulfur and fluorspar. In 1948 the estimates of the Corps of Engineers on Cumberland River traffic show a total of 1,309,000 tons, of which 572,000 tons were petroleum products. These tonnage figures clearly indicate that there is no need whatever for Federal Barge Lines service on the Tennessee and Cumberland Rivers; therefore, the HillKefauver-Sparkman amendment to S. 211 should be rejected in the interest of preserving private enterprise in the barge line business, and to avoid the serious financial losses to the Government which will be sustained by the Federal Barge Lines.

In practically all of the testimony and statements offered in connection with S. 211, and the pending amendments thereto, the emphasis has been on the operations of the Federal Barge Lines on its Mississippi River system, including the Missouri River and the Illinois River and waterway, as well as a possible extension of operations to the Tennessee and Cumberland Rivers. There is another phase of the Federal Barge Lines which has received more or less silent treatment at these hearings and in discussions incidental thereto. I refer to the Warrior division of the Federal Barge Lines, between New Orleans, La., and Birmingham, Ala. This route has been continuously operated by Inland Waterways Corporation, and its predecessor, the Mississippi-Warrior Service, since World War I, in 1918, when the Government first started in the barge line business.

The route of this Warrior River division extends eastward through the Gulf Intracoastal Waterway from New Orleans, La., to Mobile, Ala., on the Mobile and Warrior Rivers, and then northward to Port Birmingham, Ala., and includes an 18-mile standard gage railroad from there to the outskirts of the industrial community of Birmingham, Ala. Unfortunately this phase of the operation of the Federal Barge Lines has never been profitable or shown much progress; thus it has long been a headache to officials of Inland Waterways Corporation. The present management of the Government barge line, however, is not believed to be contemplating any substantial betterments to the Warrior division, even if given additional capital stock in accordance with the purposes of S. 211. In other words, this Warrior division seems to be an orphan as far as the broad conception of the Federal Barge Lines is concerned.

The provisions of the Wherry amendment to S. 211, if enacted into law, would prohibit the discontinuance or disposal of any part of the carrier operations of Inland waterways Corporation, Federal Barge Lines, for a period of at least 5 years from the date of the enactment of such amendment. This, of course, would apply to the Warrior division, as well as to the other water carrier operations of Federal.

The most forceful reason advanced against the complete discontinuance, sale, or liquidation of the Federal Barge Lines has been the fact that privately owned barge lines would not agree to continue the service and the freight rate coverage now being afforded shippers by the Government barge line. That is true with reference to the Missouri River, and to less than bargeload freight services on the Mississippi and Illinois Rivers; however, it is not true with reference to the Warrior division of Inland Waterways Corporation.

A very reputable, reliable, and responsible water carrier, privately owned, is interested in acquiring the Warrior division of the Federal Barge Lines activities and operations. It is the intention, as has been indicated by this prospective purchaser, that as a condition of sale all of the services and the freight rate coverage now provided by Federal on its Warrior division shall be continued. In view of this fact, the committee and the Congress may desire to provide the legislative authorization necessary to permit the sale, under the conditions outlined herein, of the Warrior division, which is physically separate and apart from the principal operations of the Federal Barge Lines on the Mississippi, Missouri, and Illinois Rivers.

Private enterprise in the barge-line business is thoroughly in accord with and endorses the statement of Senator Kenneth S. Wherry, of Nebraska, made to this subcommittee on April 14, 1949. In that statement Senator Wherry said, and I quote:

"It is not the purpose of the sponsors of this legislation that the facilities and services of the Federal Barge Lines should be expanded or enlarged in competition with those privately owned carriers. In order to insure that such will not be the case, and that the future activities of the Federal Barge Lines will be primarily in the field of experimentation and pioneering in accord with its original concept * *

Senator Wherry further stated, and again I quote him, as follows:

* the future activities of Federal Barge Lines should be primarily in the fields of pioneering and research in the development of its carload and less-than-carload traffic; in the development of modern and efficient public terminal facilities open to all on equal terms, including the rehabilitation and modernization of existing terminals, and in the development of all types of traffic en the newly improved rivers where it is presently authorized to operate, inIcluding the Missouri River."

The Senator stressed the fact in his statement of April 14, 1949, that the amendment to S. 211 of March 23, 1949, if enacted into law, and once again I quote: amounts to a declaration of congressional policy, clarifying and making certain the aims and objectives of the expenditures to be made."

* *

The language of the so-called Wherry amendment to S. 211 is clear and definite as to the future policy of the Federal Barge Lines relating to bargeload traffic; and Senator Wherry emphasized this in his statement to the subcommittee on April 14, 1949. The language referred to lines 13 and 18, inclusive, on page 2 of the amendment proposed on March 23, 1949, is as follows:

"Except with respect to traffic in grain and soybeans and traffic originating at or destined to points on newly improved rivers, including the Missouri River, the corporation shall not substantially expand its bargeload traffic where privately owned barge lines and terminals are ready, willing, and able to provide adequate service."

Private enterprise in the barge-line business interprets this language to mean just what it says, and what it definitely implies, and that is that the Federal Barge Lines will not expand its bargeload services nor solicit bargeload traffic in other than grain and soybeans on routes now being adequately served by privately owned barge lines; and further, that if new bargeload traffic other than grain and soybeans should develop and become available for water transportation on the Mississippi and Illinois Rivers, private enterprise shall be given first opportunity of handling the business. This is the real spirit of the Wherry amendment; in fact it is the spirit of the whole American system of free enterprise.

In this connection it would be most reassuring to and allay any misgivings of the privately owned water carriers if the Department of Commerce and the management of Inland Waterways Corporation would make at this time, a definite statement that there is no intention to expand the volume of bargeload traffic of the Federal Barge Lines on the Mississippi and Illinois Rivers.

The privately owned, financed and managed barge lines, many of whom are presently in direct competition with the Federal Barge Lines, thus favor the enactment of S. 211 with the so-called Wherry amendments of March 23, 1949.

They believe there is a broad area of cooperation between the Government owned barge line and themselves, if the true spirit and announced intent of the amendments of Senator Wherry and his colleagues are carried out and made effective. They pledge their complete cooperation with this proposed legislation, to the end that shippers needing and desiring to use water freight services in the midcontinent area can and will be given prompt, reliable, efficient, and cheap transportation via the routes of the inland barge industry.

These water carriers, private interprise in the barge line business, vigorously oppose the enactment of S. 211 as originally introduced in the Eighty-first Congress, unless the amendments proposed by Senator Wherry and his associated on March 23, 1949, are made a part thereof. They believe it fundamentally unsound and against public policy and the public interest, for the Congress to authorize an increase in the capital stock of Inland Waterways Corporation of $18,000,000. without appropriate restrictions on the use of these new funds, which are taxpayers' money. The time has come for a reappraisal of the work, functions, and activities of the Federal Barge Lines, which in the final and correct analysis is the United States Government in the commercial barge-line business.

The Wherry amendments to S. 211 give appropriate effect to such reappraisal of the Federal Barge Lines, its purposes and functions, as well as its relationship with its competitors in the field of private enterprise and private capital. Privately owned barge lines believe they can survive and live under the Wherry amendments to S. 211 because, by such provisions, their operations in bargeload traffic will not be interfered with by the Government owned barge line; they will be able to continue to expand their equipment and their services for the benefit of the Government, the shipping public and, most importantly, for the public interest.

The opportunity for harmonious cooperation between Government and private enterprise is definitely present in this pending legislation. Private enterprise in the barge-line business urges the prompt enactment of S. 211 with the Wherry amendments of March 23, 1949, in order that the benefits therefrom will begin to flow to the transportation economy of this great Nation, and particularly to the midcontinent portion thereof.

Senator MYERS. This session of the hearing of the committee will now stand adjourned.

(Whereupon, at 4:35 p. m., an adjournment was taken.)

INLAND WATERWAYS CORPORATION

TUESDAY, JUNE 28, 1949

UNITED STATES SENATE,

SUBCOMMITTEE OF THE COMMITTEE ON
INTERSTATE AND FOREIGN COMMERCE,

Washington, D. C.

The subcommittee met, pursuant to adjournment, at 10 a. m., in the Capitol committee room, Senator Johnson of Texas presiding. Present: Senators Johnston of Texas, Myers, and Reed.

Also present: Senator Russell B. Long; E. R. Jelsma and W. B. Van Horne, Jr., of the committee staff.

Senator JOHNSON of Texas. The committee will come to order.

I will say for the benefit of the witnesses present that we have 10 to 12 witnesses scheduled to testify today and tomorrow, and since the Senate is voting on amendments to the Taft-Hartley Act this afternoon and probably will be voting on them tomorrow afternoon, I doubt that the committee is going to have much opportunity to sit either afternoon. But that can be determined by Senator Myers, who is the chairman of the subcommittee and who has been detained temporarily.

Without objection, we will insert in the record a statement from Senator Kefauver in support of his amendment to include the Tennessee and Cumberland Rivers, together with certain newspaper articles.

(The statements and newspaper articles referred to follow :)

STATEMENT OF HON, ISTES KEFAUVER, A UNITED STATES SENATOR FROM THE STATE OF TENNESSEE

Mr. Chairman, the main issue under consideration here is not the establishment of an Inland Waterways Corporation; we already have this project in operation. The question is will we now continue the original purpose of the act, and if so on what basis. It is unthinkable that the Government should invest $15,000,000, as it has in this instance, and then withdraw when the benefits which a fully utilized waterway system could afford us have not yet been realized. Wider use of our Federal Barge Lines and the inclusion of other Waterways in the system could make a rich contribution to the Nation's development. If the Federal Barge Lines are to continue to pioneer and to pave the way for private enterprise to make full utilization possible, it is imperative that Congress provide some type of financial relief. If action is not taken now the existing lines will be of no value at all within a year's time. AddiFonal capital is necessary if the worn-out equipment of the Federal Barge Lines is to be replaced or modernized and the progress which is being made is to be continued.

S. 211 was not proposed with any idea of infringing on private business in the transportation field. It is intended rather to make possible cheap, efficient transportation for the use of small-business ne which otherwise would be extremely limited in scope. I shall point out later that the continuance of

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