Mr. LARCADE. I move the committee now adjourn. The CHAIRMAN. Motion has been made to adjourn. All in favor signify by saying "aye." (Chorus of "ayes.") The committee is adjourned. (Thereupon, at 12:50 p. m., the committee was adjourned, to reconvene at 10 a. m., Wednesday, February 21, 1951.) ST. LAWRENCE SEAWAY WEDNESDAY, FEBRUARY 21, 1951 HOUSE OF REPRESENTATIVES, The committee met, pursuant to adjournment, at 10:05 a. m., Hon. Henry D. Larcade presiding. Mr. LARCADE. The committee will come to order. The Chairman, the Honorable Charles A. Buckley, has requested me to preside this morning due to the fact that it is impossible for him to be present at this time. The committee is meeting for the further consideration of House Joint Resolutions 2, 3, 4, 15, 102, 122, and 159, and H. R. 2536, approving the agreement between the United States and Canada relating to the development of the resources of the Great Lakes-St. Lawrence Basin for national security and continental defense of the United States and Canada; and providing for making the St. Lawrence seaway self-liquidating. The committee wishes to say that unfortunately General Marshall, who was scheduled to appear as the first witness this morning, is ill and is unable to appear at this time. However, General Marshall has designated someone to present his statement, and at a later date General Marshall advises that he will be pleased to appear before the committee for the purpose of interrogation. Therefore, the committee will call the next witness, the Honorable John D. Small, Chairman of the Munitions Board. STATEMENT OF HON. JOHN D. SMALL, CHAIRMAN OF THE MUNITIONS BOARD Mr. SMALL. Good morning, Mr. Chairman. Mr. LARCADE. Mr. Small, the committee is very pleased to have you before them this morning. We all recognize the great service you have rendered to our country not only in the Navy, but in connection with the War Production Board during the last war. I am sure we are all pleased to have you accept the position that you have accepted in our emergency, and we are delighted to have you appear at this time. You may proceed. Mr. SMALL. Thank you, Mr. Chairman. As you stated a moment ago, Mr. Chairman, General Marshall has a slight cold, and it has affected his voice the same as my voice is affected also, but he is laid up with it and he has asked, with your permission, that I should read his statement. Do you wish me to read his statement? Mr. LARCADE. Yes. I think that may be proper. May I suggest that you speak a little louder, Mr. Small? Mr. SMALL. I shall try to, sir. Mr. LARCADE. At this time we will be glad to have you read the statement of General Marshall. Mr. SMALL. Mr. Chairman, this is the statement of the Secretary of Defense, General Marshall: Mr. Chairman, gentlemen; the Department of Defense, including the Joint Chiefs of Staff, supports the House joint resolution now before your committee which would permit implementation of the St. Lawrence seaway and power project and recommends its adoption by the Congress. Our support is based on the advantages to national defense that this project offers. First, the seaway, when completed, will increase the flow of high grade iron ore for the production of steel for munitions and other purposes from the LabradorQuebec area which is now being developed. Unless the seaway is built, obtaining ore from this new source will present serious problems of transportation including the hazards of wartime sea transportation. On the other hand, the accessibility of the Labrador-Quebec area made possible by the seaway would supplement our present supply and would furnish a substantial additional source if our present primary source should be seriously reduced. Freedom from submarine attack does not, of course, mean full security. The risk of interruption of the new seaway by enemy sabotage must be faced. The danger of sabotage, however, is already of critical importance at the locks at Sault Ste. Marie, through which our Lake Superior ores are brought in such vast quantity. Until the seaway is built, almost the whole of our iron ore supply is subject to interruptions by a single act of sabotage there. Second, the power project in connection with the seaway will provide additional sources of cheap and independent power so necessary, especially in the case of an all-out mobilization. Third, the seaway will facilitate the transportation of munitions to overseas bases. Moreover, in case of atomic attack, transportation could be diverted from one city to another. It is realized that the seaway will be closed for months every year because of ice conditions but that is equally true of the present Great Lakes transportation route from the Mesabi Range to which all interested parties have successfully adjusted their operations. Fourth, the seaway will afford access to additional shipbuilding and repairing facilities always very necessary in time of war to the maintenance of our supremacy on the high seas. Finally, it should increase the capabilities of mutual defense between Canada and the United States. I have brought with me Mr. Small, Chairman of the Munitions Board, who can explain in some detail the industrial mobilization aspects of the project. For the record, I want to add that the project has had the approval of the Department of Defense in the past and that I supported it before a committee of Congress as Secretary of State. We are still in the fortunate position of being able to buy time insofar as this project is concerned. We have not yet run short of iron ore in continental United States. Our annual supply from the Lake Superior region is declining however, in a period when our requirements are mounting rapidly. We must have other sources readily available. It is urgent that this project be begun promptly, so that by the time we must depend heavily on foreign sources of ore supply it will be ready. That, Mr. Chairman, finishes General Marshall's statement. Mr. LARCADE. Thank you very much, Mr. Small. For the benefit of the members of the committee who were late in arriving, I will say that General Marshall was unable to appear this morning and has requested Mr. Small to read his statement. General Marshall advises that at a later date he will be glad to appear before the committee for further interrogation. Now, I think you have a statement for yourself as Chairman of the Munitions Board. Is that correct? Mr. SMALL. Yes, Mr. Chairman. Mr. LARCADE. Well, we will be glad to have you appear now in that capacity. Mr. SMALL. Thank you. Mr. Chairman and members of the committee, I have been designated by the Secretary of Defense to explain in detail the Department of Defense views with respect to the St. Lawrence seaway and power project, which legislation now before you would authorize. The Department of Defense and its predecessor departments have consistently supported this legislation which would permit initiation of work on the St. Lawrence seaway and power project. We are favoring this legislation now, even more strongly than in the past. Much has been said and written on this subject. Practically every facet of the problem has been carefully examined for many years. The project is important from a Defense Department point of view, and has our full support. In summary-the projected seaway will give us an alternate transportation link to the Midwest of tremendous industrial and logistic value. In time of war, it would relieve the heavy rail traffic toward east coast ports, and some of the Atlantic port congestion. The power project will furnish large quantities of additional cheap and dependable electric power. The seaway and power projects would permit a good spread in the build-up of our heavy industry, such as defense plants and shipyards. Fortunately the construction of these projects at this time requires so small a fraction of the available supply of such materials as steel, copper, and cement, as well as of manpower, that we need not hesitate to make this investment in additional productive capacity and industrial strength. A factor with which we must steadily live is the gradual depletion of the Mesabi deposits of high-grade iron ore. This was stressed in our testimony last spring and it warrants renewed emphasis today. There are two alternate sources of supply open to us, namely, the use of low-grade domestic deposits and the importation of foreign highgrade ores. The importation and development of foreign ore must be accelerated, because the extensive and costly research and development work and the construction of facilities required to perfect the beneficiation and use of taconite is a slow process requiring years to complete. There are two principal sources of foreign high-grade iron ore in this hemisphere, South America, and Labrador. The high-grade ores of Labrador are of particular importance to national security. In time of war, if the seaway were completed, ore from Labrador could move to the lake area by a sheltered route, as contrasted with the hazardous open-ocean routes from that source and from South America. To the extent that the seaway will be available instead of ocean routes, the demands on our Navy for convoy escort will be reduced accordingly, permitting that branch of the armed services to devote its attention to the other pressing demands it will have to meet. Another important aspect of the availability of the seaway for the shipment of Labrador ore is that it provides a much more direct route to the steel mills than if we must rely on open sea transport to east coast ports, where the ore would have to be transferred to what will then be an already heavily burdened rail system. The shorter and more direct route will result in a much shorter turn-around period. Fewer vessels can carry the same quantity of ore from Labrador than would be required for the longer open-ocean route to east coast ports. These vessels would be of the lake bulk carrier type. Ore carriers designed for ocean services require 11 percent more steel than lake type carriers of the same capacity. This potential lessening of the drain on our steel supplies is worth striving for. Benefits of the more direct route, I might point out, will be equally available when we are not engaged in hostilities to the extent that the ultimate price of steel and steel products should be lower than it would be if longer routes are used with consequent higher shipping charges. Still another important factor affecting industrial mobilization is that when the need arises these Labrador sources, which are open-pit operations, can be expanded readily by the simple expedient of using more mining equipment. This has a great advantage when considered in connection with the availability of the seaway, for it would not be reasonable to expand this source of iron ore unless transportation of the ore could be accommodated readily. The seaway is a highly expandable traffic artery, which means that its availability will vastly increase the possibilities of exploiting the Labrador fields. There are other logistic implications in the seaway which are of very substantial importance. The additional transportation facilities would remove, to some extent, the strain on other types of transportation in time of war. Cargo from the Middle West destined for overseas points could be loaded at Great Lakes ports for final discharge at destination, thereby saving the rehandling of thousands of tons of cargo at seacoast ports. This would effect a very considerable saving of manpower and thus permit speedier delivery to points of destination. Direct shipment from the Great Lakes ports would have the additional advantages of providing a wide distribution of port facilities and of reducing transportation and storage bottlenecks. Short hauls from factories to shipping ports would release rolling stock and other inland transport facilities for other uses. Another important logistical consideration is that the seaway would reduce, by about 1,000 miles, the open sea route between the Lake ports of the United States and the British Isles. This would reduce the task of providing our naval patrols and convoys, and would decrease losses from enemy action. The hydroelectric power which the St. Lawrence project can furnish will be both plentiful and cheap, both characteristics which make it particularly desirable in defense production. Experience has demonstrated that defense production must be expected to add very substantially to power demand. This is being superimposed upon the steady rise of normal demand, one which was earlier estimated to require by 1960 in the region served by the St. Lawrence several times as much power-in addition to that already planned-as the St. Lawrence project can supply, With respect to the effect of the proposed seaway on the shipbuilding and ship repair industry, a study of the experience of the last war indicates that it was necessary to use such facilities on the Great Lakes as were available to their maximum capacity at that time in carrying on a small boat and bulk-type Lake carrier program and in the construction of combat service and supply ocean vessels for the armed services. Vessels constructed in Great Lakes shipyards |