Mr. JONES. NO; but the issuance of these certificates would mean you would give consideration to the fact of the availability of this transportation and we would carry out our program of dispersal and decentralization of industry. I do not see how we are going to divorce the consideration of those factors from any transportation system that we might develop in this country. Secretary SAWYER. Well, neither do I. Mr. JONES. It is my apprehension that we have not done enough of it already. The Secretary SAWYER. I am sure you are right. We have not done enough decentralization. I might say that the final decision with reference to certificates of necessity does not lie with me. National Production Authority in my Department has made a preliminary survey in many cases and has made recommendations first to Mr. Symington, who had original authority, and then to General Harrison who has it now. My answer to your question was based upon our survey, which did not undertake, as I have said, to direct individual businesses to put their plants in some place other than the place where they wanted to put them. As a matter of fact, there are many factors which enter into plant location aside from the over-all theory of decentralization. And, for the most part, a steel plant has to be put where various factors indicate transportation and availability of ore and labor and other things. Mr. JONES. I take it then that we will not have any decentralization for security purposes in the steel industry? Secretary SAWYER. The steel industry is to a certain extent decentralized already. A number of the certificates of necessity that have been issued are outside of the Pittsburgh area so to speak. There has been expansion in Texas. I have issued one or approved one for Pennsylvania and other places. I just happen to remember those two. Mr. JONES. Did you issue one up near Baltimore? Secretary SAWYER. I think so. Mr. JONES. New Jersey? Secretary SAWYER. I think so. Mr. JONES. Do you recall the distance from the sea of the one issued in Baltimore? Secretary SAWYER. NO. Mr. JONES. Well, what factors do you take into consideration in issuing these certificates when you weigh the evidence of security? Secretary SAWYER. The principal factor we take into consideration is the desire to get more steel, and we assume that the company that wants to build a plant, is willing to put its own money in, and so forth, is pretty well able to judge where it ought to be located. As I started to say a moment ago, the National Security Resources Board about 2 years ago put out a pamphlet dealing with this whole question of decentralization. Theoretically, it is a very sound proposition, in my judgment. Practically, there are many hurdles which must be gotten over before it can be applied. Probably we have to have a much broader Government control of our economy than we have today in order to make it effective. The factors which are involved in plant location and which are the normal business elements. involved for the most part must be decided by business itself, in my judgment. Mr. JONES. The South American ore that is to be brought into the country in the next few years will be dispatched to where? Will it use the facilities of the St. Lawrence Seaway? Secretary SAWYER. I do not know. Of course, that will depend probably upon the cost of transportation. I assume that the chances are it will for the most part go to the Atlantic seaboard, but there is no reason why it cannot go up the St. Lawrence if the seaway is built and the boats are available. Mr. JONES. Mr. Secretary, we have been considering before this committee the decentralization and dispersal of Government agencies not necessary in the District of Columbia for security reasons. We have heard numerous witnesses testify as to the possibility and probability of an attack and how we would manage in such an attack. They tell us that the nearer to the coast the more available we are for enemy attacks. Now, if we want to make these waterway developments just to set up an easy target for the enemy, then we might as well quit talking about decentralization of Government and industry and let them run at will. Do you not think so? Secretary SAWYER. No, I do not. I think that the building of the St. Lawrence seaway argues against the proposition. I think that the very fact that more plants are not built on the coast and subject to attack by whatever method of attack might be involved is an argument in favor of the thing you are discussing. Now, as far as the decentralization of Government agencies, of course, that is a wholly different matter. That is something the Government can control. I think that that is in a different area of discussion. Mr. JONES. Those people would not be too hard to persuade, would they? Secretary SAWYER. To move? Mr. JONES. Yes. Secretary SAWYER. You would be surprised how hard it is to persuade them. I have one office in my own department. They want to stay here and run the risks. Mr. JONES. I am talking about private industry, persuasion in private industry for decentralization, not the dispersal of Government agencies. One more question. How long each year will the seaway be frozen and inaccessible for travel? Secretary SAWYER. The available time is 7, or 8 months. I guess about 4 months it would be frozen. That applies now, of course, to to the movement of ore from the north just as it would if the seaway is built. Mr. JONES. Is it a general policy of those using the seaways to stockpile during the usable months to carry them forward to the time Secretary SAWYER. I understand it is, but the stockpile gets a little low occasionally. Mr. JONES. That is all, Mr. Chairman. Thank you very much, Mr. Secretary. The CHAIRMAN. Mr. Lanham? The CHAIRMAN. Mr. Wood? Mr. BRAY. No questions. The CHAIRMAN. Thank you very much, Mr. Secretary. We now have the Secretary of State, Mr. Acheson. He is very busy and he would like to go right ahead. Mr. Secretary. STATEMENT OF HON. DEAN ACHESON, SECRETARY OF STATE Secretary ACHESON. Mr. Chairman, members of the committee, I have appeared before you to testify in support of the St. Lawrence seaway and power project on previous occasions. Today the threatening trend of international developments has created an even deeper sense of urgency with respect to this project than existed before. During the past 6 months our Government has been obliged to assume expanding burdens of an economic, diplomatic, and military character. Events in Korea demonstrate that we must develop further our economic and military strength in order to bear these burdens with assurance of success. Since we may have to meet even graver threats to our security in the future than those which we face today, we must not only maintain our strength; we must steadily augment it. Therefore, it is essential to take stock of our vast resources and to plan how they can most effectively contribute to our security during a protracted period of international tension. We must select and act upon the measures we can take now which will assure the greatest return in increased strength and security later on. I believe the St. Lawrence seaway and power project is outstanding in this respect. I should like to explore with you, therefore, the bases of our recommendation that the project, as set forth in the 1941 St. Lawrence agreement and in the legislation now before you, be approved. Forty-six miles of St. Lawrence River boundary waters is the principal area to be developed jointly by the two Governments under the terms of the 1941 agreement. Failure to develop this stretch of the river known as the International Rapids section and to modernize the 68-mile Canadian section downstream, has prevented the linking together of the 1,000 miles of the Great Lakes with the 1,000 miles of the St. Lawrence River east from the rapids to the Atlantic Ocean for deep-draft shipping. Large expenditures have been made by both the United States and Canadian Governments in the construction of locks such as the MacArthur lock at Sault Ste. Marie and those of the Welland Canal as well as in the deepening of harbors and river channels. The maximum use of these works cannot be achieved until the construction of the 46-mile stretch of the seaway in the International Rapids section and the corresponding work in the Canadian section extending downstream to Montreal have been completed. The lack of this development constitutes an obstacle to the full utilization of the great transportation route afforded by this river and hinders the full economic development of the Northeast and North Central regions of our country. In this way, it prevents them from making their full contribution to our security. Now, as to the legal framework for the utilization of the boundary waters. The freedom to use the waters of this great inland sea with out discrimination is guaranteed to the citizens of both countries by treaties beginning in 1794 and ending with the Boundary Waters Treaty of 1909. The right of navigation extends to "all canals connecting boundary waters" and would be applicable to the proposed seaway. The development of very large quantities of electric power by the construction of a dam and reservoir in the International Rapids section is also contemplated in the 1941 agreement. The 1909 treaty provides that no uses, obstructions or diversions of boundary waters might thereafter be made on either side of the line which affect the natural level or flow of the waters on the other side of the line, without resort to the International Joint Commission or to a special agreement between the parties. Article XIII of the treaty further provides that— In all cases where special agreements between the high contracting parties hereto are referred to in the foregoing articles, such agreements are understood and intended to include not only direct agreements between the high contracting parties, but also any mutual arrangement between the United States and the Dominion of Canada expressed by concurrent or reciprocal legislation on the parof Congress and the Parliament of the Dominion. As stated in section 1 of the joint resolution, this provision constitutes the basis for the negotiation of the agreement of March 19, 1941, and its submission to Congress for approval. House Joint Resolution 3, which is typical of the several current proposals on this subject, approves this agreement of 1941, with the exception of three articles in whole or in part. It also authorizes the President to fulfill the undertakings made on behalf of the United States in the agreement after the Canadian Government has approved it together with the changes made in it by this resolution. I want particularly to explain the reasons for the exceptions to certain sections of the agreement set forth on page 2, lines 1 to 6, of this measure, House Joint Resolution 3. The first exception relates to article VII of the agreement. This article would assure continuance of the rights of navigation in the Great Lakes Basin on a permanent basis. As the 1909 treaty guaranteeing these rights contains provisions for termination, it was considered essential that the possibility of termination should be eliminated. The Senate has indicated that this is a matter more appropriately dealt with by a treaty and it is understood that the Canadians are willing to negotiate such a treaty with representatives of this Government. The second exception made by the measure relates to article VIII, paragraph (c) of the agreement, which provides that if either country should authorize diversions of water from the Great Lakes system, other or greater than those permitted on January 1, 1940, the Government of such country would give immediate consideration to the representations of the other. If satisfactory settlement were not possible, the article provides for an arbitral tribunal. The particular dispute envisaged by this article related to possible future increase in the diversion of Lake Michigan waters through the Chicago drainage canal. The issue as to the Chicago drainage canal was settled by the decision of the Supreme Court in Wisconsin v. Illinois in April 1930, which enjoined the objectionable diversion. The International Joint Commission has complete jurisdiction over diversion of boundary waters in general, and both countries have regarded with satisfaction the exercise of that jurisdiction by the Commission. Because of these facts it is believed that this provision for a special arbitral tribunal is unnecessary, and consequently its omission is advisable. The third exception effected by this measure relates to article IX of the agreement concerning the Niagara River. The subject matter of this article was dealt with in the treaty concerning uses of the waters of the Niagara River signed on February 27, 1950, which is already in force between the two countries. The joint resolution also contains a provision in section 3 that is not included in the 1941 agreement, namely, that the seaway shall be self-luquidating through the payment of tolls. The additional agreement, to be negotiated on this subject with Canada, is to become effective only after approval by the Congress of the United States and the Parliament of Canada. We have received assurances that the Canadian Government is prepared to agree to the principle of making the St. Lawrence seaway self-liquidating by means of toll charges, subject to the conclusion of mutually satisfactory arrangements. At this point, Mr. Chairman, I should like to draw to your attention the notes exchanged between this Government and the Canadian Government on May 8, 1950, amending article II (b) of the agreement. Through this exchange the completion date of December 31, 1948, for the navigation works was replaced by more flexible phraseology providing for completion of the project within 8 years after the date of entry into force of the agreement. I suggest that the legislation now before you be amended to include approval of this exchange of notes, and I should like to insert in the record at this time wording which you may wish to consider in effecting such a change. (The proposed amendment of H. J. Res. 3, presented by Secretary Acheson, is as follows:) PROPOSED AMENDMENT OF HOUSE JOINT RESOLUTION 3 In view of the amendment of the agreement of March 19, 1941, by the exchange of notes with Canada signed May 8, 1950, the Department of State suggests that House Joint Resolution 3 should be revised to indicate approval of the agreement as amended. It is proposed for consideration that this be accomplished by the following changes in that bill: 1. Title, fourth line, insert after Canada the words ", as amended". 2. Page 1, line 8, insert after "session," the phrase "as amended by an exchange of notes signed May 8, 1950,”. 3. Page 2, line 2, replace the word "thereof" with the words "of the said agreement". 4. Page 2, line 4, insert after "agreement," the words "as amended,". 5. Page 2, line 7, insert after the word "agreement" the words "and exchange of notes". Secretary ACHESON. Now on the value of the St. Lawrence project. The administration is requesting the Congress to approve this agreement because of the contribution it will make to the growth of our economy and of its particular value to national defense. It will provide an interior route for the transportation of essential materials; in particular, for iron ore from the Labrador fields to the steel mills of western Pennsylvania, Ohio, and to other parts of the Great Lakes area. The need for this ore as a supplement to the dwindling reserves of the Mesabi Range is urgent. This project will also furnish a dependable source of additional lowcost power which can be used to increase the production of goods which |