stance last year that it would be approximately 5 years from the date of his testimony until those companies could bring in a million to a million and a half tons of ore from that Labrador deposit, and again. that it would be approximately 8 years before they would arrive at the figure of 10 million tons.

He further testified, as I recall, that their plans for mining and shipment of ore from those deposits at that time encompassed only the mining of 10 million tons of ore. If you have any other figure that those gentlemen contemplate bringing into this country, I would appreciate it if you would call it to my attention at this time.

Secretary SAWYER. I have no other figure. I would prefer to have Mr. Humphrey do his own testifying. But my information is that the schedule which he had in mind at that time has been stepped up very drastically, perhaps partly due to the security element which you mentioned a moment ago.

Mr. PICKETT. On page 243 of the hearings of last year he says that the whole program is being laid out for the first unit of 10 million tons of ore a year and the tracks are being designed to take care of an additional 10 million tons a year. In addition there is a reserve unit for 10 million tons additional at some future time.

The immediate problem, unless his figures have been drastically revised as you indicate, would be that in the interest of national defense we would be bringing 10 million tons of ore a year over the seaway. If we take a doubled figure, then we would be dealing with the matter of 20 million tons a year.

In your judgment, is the time element involved and the limited amount of ore that they say they are going to mine and bring into this country as compared to the amount that we need to get, sufficient to justify the construction of the seaway at the expenditures involved? Secretary SAWYER. Yes. I think the only thing we can charge ourselves with is having put it off too long. I think there is no argument whatever against doing it, because the amount of ore immediately available or available within the next 4 or 5 years would not be all that we can get later. I think every review of the subject indicates that the sooner we get at it the better, and if we had done this 10 years ago we would be much better off today.

Mr. PICKETT. Now, in dealing with the subject and referring to the project as the St. Lawrence seaway, I take it that all of us are speaking of it as a project that goes from the mouth of the St. Lawrence River on up and into the Great Lakes through the Welland Canal and the Sault locks between the lakes that we are now using on a minimum draft. Is that right?

Secretary SAWYER. Yes; I think that is correct.

Mr. PICKETT. And that would be the whole project as we deal with it, and we would not just stop off with the St. Lawrence seaway project before

Secretary SAWYER. That is where the boats will operate, yes.

Mr. PICKETT. And any indication that there would be any stoppage of consideration of the project when we get into Lake Ontario-I believe that is the first lake up there-would be contrary to what we all contemplate is an accurate description of the project?

Secretary SAWYER. Oh, I should think so, yes.

Mr. PICKETT. I believe that is all, Mr. Secretary. Thank you. The CHAIRMAN. Mr. Scudder?

Mr. SCUDDER. Mr. Secretary, as I understood your statement you would plan on bringing from 57 to 84 million tons of traffic through the canal. What percentage of that traffic would be iron ore?

Secretary SAWYER. Well, there is a table here I think which is on page 9 which shows estimated potential traffic divided up among iron ore, grain, coal, petroleum, general cargo, and ballast shipping. Mr. DONDERO. It is 371⁄2 million tons.

Secretary SAWYER. It is 30 to 37% million tons of iron ore.

Mr. SCUDDER. Now, is the ore available and could it be delivered at a point where it could be shipped through the canal? What are the facilities for securing the iron ore to be placed at the dock to be picked up?

Secretary SAWYER. Well, you asked me two questions. As far as facilities are concerned, I understand that on the Labrador end they are now building a railroad-and, in answer to Congressman Pickett's question, far ahead of schedule-to bring the ore from the mines to Seven Islands, and from there on, of course, up the St. Lawrence.

As far as the use of the canal is concerned, the whole operation may deal, I assume, with other ore than that that comes from Labrador.

Mr. SCUDDER. Would the facilities be sufficient to haul the amount of ore to the canal that would be necessary to amortize its cost over the period of 50 years which you project?

Secretary SAWYER. You mean will there be enough boats?

Mr. SCUDDER. Yes. And will the ore be available to furnish the cargoes to pay that toll?

Secretary SAWYER. I am told that it will be. Secretary Chapman I think plans to testify in some detail on that.

Mr. SCUDDER. I am very much interested to know if this project will support itself and pay its way. Now, I understood Mr. Dondero's question to be that this would be financed on a 50-50 basis. The way we deal on a 50-50 basis very generally turns out to be that we furnish the horse and they furnish a jackrabbit. Now, the cost of this will be about $300,000,000 to the United States and about $300,000,000 to Canada?

Mr. DONDERO. Mr. Chairman, may I interrupt at this point to say this? Canada is way ahead of the United States. Fifty years ago they built the 14-foot canal, and they spent $133,000,000 on the Welland Canal already completed as a part of this vast water project.

Secretary SAWYER. I think that is a very proper answer, Congressman. Furthermore, while I am inclined to agree with you with reference to some things that we have done, we cannot say that of Canada. They have done their full share in any enterprise that we have been engaged in together I think, and, as the Congressman points out, perhaps more.

Mr. SCUDDER. Will Canada be obligating themselves to an equal amount with the United States for the construction costs of the canal? Secretary SAWYER. No. I think the effort is made to equalize what they have spent and what we will spend. I mean the total expenditure over the years for the whole operation.

Mr. McGREGOR. Will the gentleman yield? Is that figured on the present-day cost, Mr. Secretary? Is your statement figured on present-day costs of construction or is it figured on the cost of the Welland Canal at the time it was built?

Secretary SAWYER. General Pick will give you detailed answers to that question. But I am told that in the main they will get the advantage of the fact that they spent their money when it was worth more than it is today.

Mr. McGREGOR. They will charge us as their proportionate share what it would cost to build it today?

Mr. DONDERO. Oh, no.

Secretary SAWYER. No; I think not.

Mr. DONDERO. He is trying to put the answer in your mouth. Mr. MCGREGOR. If my friend from Michigan knew the Secretary as I know him he would not make that statement. I am just trying to get the facts, but I think the testimony will show that whatever was required to build the Welland Canal when they built it, plus the increased costs if it was to be built now, is to be considered a part of their 50-50 basis. In other words, Canada is going to make a tremendous profit on the fact that she built the Welland Canal when costs of construction were very low and will charge us with what it would cost now. The difference of course is profit to Canada.

Secretary SAWYER. I am told that is not correct. But, even if it were, I assume they might be entitled to something because of the fact that they did it many years ago. However, the exact figures will be furnished and also the calculations will be furnished by General Pick who is prepared to testify on that.

Mr. SCUDDER. Mr. Secretary, I would like to have that phase of the testimony developed, so that we would know how much our partner is going to put into the deal. I think if we are going to enter into a partnership agreement we should know definitely how much we are going to spend and how much they are going to spend and the percentages of the revenues derived that would go back to each of the partners in the deal. I would like to have our responsibilities set up, so that we do not seem to get into international projects which are too one-sided where we pay the entire bill and they furnish a little lip service. This is a big project and I believe it should be handled in a businesslike manner. I would appreciate the development of that phase.

The CHAIRMAN. Mr. Jones?

Mr. JONES. Mr. Secretary, inevitably when the Government considers development of a multipurpose project such as this the charge is made that the construction of such a project will constitute a trespass and an infringement on our private enterprise. Would you like to comment on that?

Secretary SAWYER. I can comment to this extent: I am not one of those who is against private enterprise, as you probably know, but I think there are times when things have to be done by the Government, and I think this is one of them.

Mr. JONES. Do you consider it a sound and wise policy of the Government to develop its natural resources, such as waterway developments, generation of hydroelectric power, on those streams that private enterprise has not done and has not manifested an intention of doing?

Secretary SAWYER. I am very much in favor of the development of water-power resources either by private enterprise or by the Government. If, as you say, private enterprise has not done it, I am in favor

81181-51-pt. 1——3

of the Government doing it. In this particular case I think we should move ahead on the project. By "we," I mean the Government.

Mr. PICKETT. Would you yield to me just a moment? I understand, Mr. Secretary, there is a power authority of the State of New York that has been petitioning for the privilege of constructing power-generating facilities for a number of years. Now, is that not a refutation of the implication of Mr. Jones' question that private enterprise has not done it or has not indicated it wants to do it?

Mr. JONES. I can answer that for the gentleman from Texas by saying that the State of New York is still "government" and has not divorced itself from government, so, consequently, I do not think of the State of New York as being a private-enterprise system.

Mr. BLATNIK. Will the gentleman yield?

Mr. JONES. Let me carry it a little further. Mr. Secretary, there has been some thought given to the fact that this is such an attractive proposition for private enterprise that the whole project should be held in abeyance until private enterprise has an opportunity to develop it. Would you like to comment on that?

Secretary SAWYER. I do not agree with that at all. I think it is high time for us to move ahead with it, and I have no information which leads me to think that private enterprise is interested in going ahead with the matter at this time. It is obviously a matter which must involve a dealing between governments, and I doubt if private enterprise could go ahead with it and do the things that have to be done. But, even if it could, I am still in favor of the Government doing it.

Mr. JONES. Mr. Secretary, will you tell us of any area in the United States where there is not now an acute shortage of electricity?

Secretary SAWYER. I know of no area. There may be but there is no doubt that over all the United States there is an acute shortage, and that is particularly true in New England.

Mr. JONES. Do you know of any instances in which the Government has carried out a project similar to this proposed in the United States that has not attested to the foresight of the Government in making wise investments in the development of navigation and the generation of hydroelectric power?

Secretary SAWYER. I think, generally, to answer your question, the water-power projects that have been initiated and are now in operation have proved to be of tremendous benefit to the areas where they are located.

Mr. JONES. And, Mr. Secretary, in the development of those projects have they not always been accompanied with the cries of those who said that it will destroy certain phases of our private-enterprise system, such as the electric power companies, the railroads, and transportation, and those who have contended all along that that would come to pass?

Secretary SAWYER. I believe you are correct in saying that most of these enterprises have been accompanied by cries, as you state, and opposition. I think that that is perhaps normal when we undertake to do anything different from what we have done. But here, it seems to me, as I have stated, that whatever opposition there is, understandable as it may be, does not measure up at all with the tremendous advantages and the need of this operation as it unfolds itself today.

Mr. JONES. Now let me call your attention to your testimony on page 5 of the statement in the first paragraph. You say:

In recent years it has been a policy of Government for the decentralization of war industries.

Secretary SAWYER. Where is this? I beg your pardon.

Mr. JONES. Page 5, your first paragraph. There is some alarm as to the fact that we are not decentralizing the basic industries as we proposed in the last 2 or 3 years, and I call your attention to the fact that in the saturated areas now we are having further expansion of steel industries that it was our notion would be decentralized. Why is that taking place?

Secretary SAWYER. I do not believe you are reading from my testimony, Congressman. I do not find it.

Mr. JONES. You say:

In the Department of Commerce we have already issued certificates of necessity for the construction of sufficient additional capacity to bring the total above 118,000,000 tons in 1952.

In the issuance of these certificates, do you not take into consideration

Secretary SAWYER. Now you are not reading from my testimony. Mr. JONES. I beg your pardon?

Secretary SAWYER. You are not reading from my testimony now. You were a minute ago.

Mr. JONES. Let me hand it to you.

Secretary SAWYER. I said, "In the Department of Commerce we have already issued certificates of necessity for construction of sufficient additional capacity to bring the total above 118,000,000 tons in 1952."

Mr. JONES. Yes, sir.

Secretary SAWYER. Yes.

Mr. JONES. Now, the question I propounded was: Did you not take into consideration national security in the issuance of these certificates?

Secretary SAWYER. We certainly did. If you mean by your question did we direct the people who were building these plants to put them in different places than they suggested, the answer is "No." We are not organized, as a matter of fact, to direct industry where to put its plants. We can give suggestions. But I can say very frankly that there was no order issued to a company that came in and asked for a certificate of necessity to put their plants somewhere else by reason of the consideration of decentralization, as far as I know.

Mr. JONES. We have continued to hold forth with such a policy. Is it your intention rather to

Secretary SAWYER. A year or two ago

Mr. JONES. The point I am getting at is this, Mr. Secretary: There must be some assurance down the line that we are not going, by virtue of the construction of this seaway, to have a given area that is already saturated with war industries further encumbered by putting additional plants in there.

Secretary SAWYER. I am not quite sure I understand what you mean. Do you mean that in connection with this St. Lawrence seaway we should put some inhibition upon the location of plants in the Middle West?