(The list is as follows:)

OFFICERS AND DIRECTORS FOR 1949

OFFICERS

1

B. Lee Mallory, Jr., president; Maynard Holt, vice president; William R. King, treasurer; C. A. Mitchell, commissioner; C. E. McDaniel, assistant commissioner

EXECUTIVE COMMITTEE

William H. Bryce, chairman; Alonzo Bennett; Maynard Holt; J. E. Hooks; W. R. King; B. Lee Mallory, Jr.; J. T. Roach

BOARD OF DIRECTORS

L. T. Barringer, L. T. Barringer & Co.; Alonzo Bennett, Federal Compress & Warehouse Co.; Arthur Bower, Memphis Cotton Exchange; William H. Bryce, Dixie Wax Paper Co.; J. B. Carlin, Jr., Forest Products Chemical Co.; J. E. Davis, Firestone Tire & Rubber Co.; Harry S. Edwards, Pidgeon-Thomas Iron Co.; William W. Goodman, American Finishing Co.; E. E. Hoehle, Jones & Laughlin Steel Corp.; Maynard Holt, Oliver-Finnie Co.; J. E. Hooks, Pittsburgh Plate Glass Co.; William R. King, Wm. R. Moore Dry Goods Co.; T. Walker Lewis, Lewis Supply Co.; B. Lee Mallory, Jr., Memphis Compress & Storage Co.; J. W. McDonnell, Memphis Furniture Mfg. Co.; Edmund Orgill, Orgill Bros. & Co.; Frank Pidgeon, Memphis and Shelby County Harbor and Port Commission; J. T. Roach, Southern Central Co.; Howard Tayloe, Tavloe Paper Co.; F. R. Thomas, Fischer Lime & Cement Co.; J. J. Valentine, Memphis Associated Retailers; Don Warren, Stratton-Warren Hardware Co.; A. E. Wehmeyer, Canova Foods, Inc.; Harry Wellford, Wellford Distributors; Jesse D. Wooten, Mid-South Oil Co.

Mr. MITCHELL. The Memphis interests for whom I speak are vitally interested in the rehabilitation and continued operation of the Federal Barge Line, and are convinced that it must be rehabilitated if it is to be continued in operation. We think that the rehabilitation and continued operation of the Federal Barge Line is of great importance, not only to the port cities like Memphis and others located on the waterways served by the Federal Barge Line, but also to the entire midcontinent area of the United States located away from the 'waterways, and whose cities and towns enjoy the benefits of the Federal Barge Line's services and rates through the maintenance of Joint barge-rail, rail-barge, and rail-barge-rail carload and less-thancarload rates, which are based differentially under the. all-rail rates, and the saving afforded by these joint differential rates is available. to practically all the midcontinent area, stretching from New York, Pennsylvania, and the South Atlantic States westward to the Dakotas, Colorado, Kansas, Oklahoma, and Texas.

Joint barge-rail and rail-barge rates are in effect in connection with the Federal Barge Line to and from Memphis, to and from a vast area stretching from Pittsburgh and Buffalo on the east to the Dakotas, Nebraska, and Colorado on the west via the ports of Cairo, St. Louis, East St. Louis, and other ports north of Cairo. Such joint differential rates are also available to and from Memphis via Vicksburg, Baton Rouge, or New Orleans, to a large southern area stretching from Florida on the east to Texas on the west. These territories from and to which rates are available to and from Memphis in connection with the Federal Barge Line and the rail carriers, are graphically portrayed in the map attached to my statement which has been submitted here. I would like as refer to that map for just a moment. The shaded areas on the map are the areas from and to which joint barge-rail. differential rates are in effect, to and from Memphis.

Mr. MITCHELL. The carload and less-carload rates maintained by the Federal Barge Line between the ports it serves are related to the rail rates and generally reflect a differential of 20 percent under the port-to-port rail rates. These same differentials reflecting 20 percent of the port-to-port rail rates are extended to the inland points to and from which joint barge-rail, rail-barge and rail-barge-rail rates apply. For example, the carload and less-than-carload lot joint rates between Memphis and points throughout the upper shaded area shown on the map attached to this statement, reflect differentials that are made 20 percent below the rail rate applying between Memphis and Cairo, St. Louis, Peoria, or whatever upper port such joint rates apply through; likewise, the rates between Memphis and the shaded area to the south of Memphis on the map reflect differentials 20 percent below the rail rates between Memphis and Vicksburg, Baton Rouge, or New Orleans.

The joint rate structure applicable in connection with the Federal Barge Line and the rail lines has been built up over a long period of years, involving numerous extensive cases before the Interstate Commerce Commission, as well as years of negotiations with the rail lines, all involving tremendous effort and great expense, and all of this vast system of joint rates would go for nothing if the Federal Barge Line

is allowed now to drop out of the picture for want of funds to rehabilitate its facilities and services.

In addition to these joint water and rail rates on carload and lesscarload traffic, the bargeload rates and services maintained by the Federal Barge Lines are available to all the port cities served by it, including Minneapolis-St. Paul on the north, and New Orleans and Mobile on the south, and joint all-water bargeload rates are also available to and from points on the intracoastal canal. These bargeload rates are not related to the rail rates and are substantially lower than the rail rates.

Continuation of the services and rates of the Federal Barge Lines, particularly on carload and less-carload traffic, which are the rates and services of most concern to small business and to the shippers and receivers of Memphis, is more important today than it was 2 years ago in more ways than one. For one thing, over the past 2%1⁄2 years the rail rates have been very greatly increased, and this has naturally increased the amount of the 20 percent barge differentials. Another important reason, however, is that the Federal Barge Line is now substantially the only barge line which continues to offer services to the shippers of Memphis on carload and less-carload traffic. One large privately owned barge line which formerly maintained carload and less-carload rates to and from Memphis, and also joint rail-barge and barge-rail carload and less-carload rates to and from Memphis, no longer accepts less than bargeload traffic. Although it still maintains local and joint rates on carload and less-than-carload-lot traffic, that line has had in effect since October 8, 1948, a complete embargo against the acceptance of any carload or less-carload traffic from, to, through or via any ports served by it. That line is no longer interested in handling less-than-bargeload traffic. Its bargeload rates are based on minimum quantities of 200, 300, 400, and 500 tons, with the rates graduated, the highest applying on the 200-ton minimum and the lowest on the 500-ton minimum.

As an example, their bargeload rates between Memphis, Tenn., and Pittsburgh, Pa., on iron and steel, are $3.29 per ton on 500-ton minimum, $3.60 per ton on 400-ton minimum, $4.08 per ton on 300-ton minimum, and $4.88 per ton on 200-ton minimum. A shipment of 200 tons is the equivalent of eight 50,000-pound carloads. A minimum carload by rail is 36,000 pounds or 18 tons. The 200-ton barge rate is equal to about 11 such minimum carloads. These bargeload carriers maintain no rates on minimums less than 200 tons and, therefore, it should be patent that small business simply could not avail itself of these bargeload services. There is one other barge line which maintains joint rail-barge and barge-rail rates on carload and lesscarload traffic. The joint rates this line maintains with the rail lines are not nearly on such an extensive scale as those of the Federal Barge Line. In addition to that, this privately owned line we here have reference to-that is, the American Barge Line-in October 1948, placed an embargo against all carload and less-carload traffic moving from or via Memphis or from or via New Orleans. The effect of this embargo is to confine its handling of less-than-bargeload traffic to south-bound shipments only. That is shipments consigned to Memphis and New Orleans.

In other words, it embargoed all

carload and less-carload traffic originating at New Orleans or at Memphis or moving into either point by rail for movement beyond by barge at through joint carload or less-carload rates.

That line maintains joint rail-barge carload and less-carload rates, for example, from points in New England and eastern territories via Aliquippa, Conway, and Glassport, Pa., and from Central Freight Association Territory via the ports just named or via Louisville, Ky., or Evansville, Ind., and will accept southbound carload and lesscarload traffic under such rates. That line refuses to accept carload or less-carload shipments moving from Memphis or New Orleans, and thus our shippers are deprived of its carload and less-carload services. That line has no joint rail-barge, or barge-rail rates on carload or less-carload or on any other traffic between Memphis and interior rail points in Illinois, western Indiana, or southern Wisconsin, generally known as Illinois Freight Association Territory, nor points west thereof. Neither does it maintain carload or less-carload rates or services between its ports on all-water movement in either direction. Some of the principal commodities that have moved via the Federal Barge Line to, from, or through Memphis, include rice; cotton linters, cottonseed fiber, shavings, sweepings, motes; cottonseed meal and cake, bran, hulls; soybean oil cake meal; coffee; sugar; iron and steel (wire) nails; iron and steel beams, bands, bars, plate, posts, structural; agricultural implements and parts; automobiles and parts; furniture, not metal; beer; oyster shells; newsprint paper; printing paper; wrapping paper; canned goods; prepared roofing; soap and soap powders; window glass; drugs and toilet preparations; paper, tablets, books, magazines; stoves and parts; vinegar, and matches. Those are just some of the commodities that have moved in volume and there. are many other commodities, of course, that have moved.

We believe it should be obvious that small shippers and receivers, those we generally refer to as small business, would be utterly unable to use the bargeload services of the privately owned lines, and if these shippers and receivers throughout the midcontinent area are to receive the benefits and advantages of water transportation, the Federal Barge Line must be rehabilitated and maintained as a going concern.

We desire to fully concur in the position to be taken in this matter by the Mississippi Valley Association, of which we are members. The position of that association will be given by its President, Mr. Lachlan Macleay.

Thank you, gentlemen, for the opportunity of appearing here. Mr. BECKWORTH. Thank you very much.

The next witness will be Mr. Lachlan Macleay, president of the Mississippi Valley Association. Mr. Macleay.

STATEMENT OF LACHLAN MACLEAY, PRESIDENT OF THE MISSISSIPPI VALLEY ASSOCIATION, ST. LOUIS, MO.

Mr. MACLEAY. Mr. Chairman and gentlemen of the committee, I appreciate very much the opportunity granted by the committee for me to appear and express the views of our association. We have been connected with the Inland Waterways Corporation since its inception. It was my privilege to attend the original hearings here

in 1924, and the hearings again in 1928. We followed the activities of the Corporation over the years, and we realize that its present condition requires action by the Congress that will result in its rehabilitation and the building of necessary new equipment.

I have a short formal statement which I want to make to the committee in support of H. R. 4978.

My name is Lachlan Macleay. I am president of the Mississippi Valley Association, which maintains its principal office at 511 Locust Street, St. Louis, Mo. The association also has offices in Omaha, Nebr.; Chicago, Ill.; Cincinnati, Ohio; and Washington, D. C.

The Mississippi Valley Association is a voluntary nonprofit association, incorporated under the laws of the State of Louisiana in 1919. Its purpose is to foster and promote industry, commerce and agriculture in the midcontinent area drained by the rivers which flow into the Gulf of Mexico, and its membership is composed of individuals, business concerns and civic and commercial organizations located in more than 20 States.

Since its organization, the association has devoted a large part of its effort to the development and expansion of transportation facilities, which are so vital to the present and future welfare of the interior of this country.

I want to interpolate and state that we are not a waterway organization. We are a transportation-minded organization. We are just as much interested in the development of railroads and truck lines as we are in waterways, but what we want is the best, lowest-cost, and the most economical integrated transportation service for all of the people in the Mississippi Basin.

As a part of that program of development of transportation facilities, the association has had and now has a very great interest in the development of modern channels for the navigation of our rivers, and in the development of modern and efficient transportation facilities thereon.

During the past 25 years, the Inland Waterways Corporation, operating Federal Barge Lines, has played an important part in that program, and has been of great value in pioneering the development of low-cost water transportation, particularly on the Mississippi and Illinois Rivers. Naturally, we are very much interested in the future of the Federal Barge Lines, and that matter has been the subject of a great deal of consideration within the association.

At the association's annual meeting held-in St. Louis in February of this year, it was perhaps the most active matter on the docket, and several plans for reorganization and realinement of its functions were submitted and discussed at length. At that time, the association readopted its resolution of the preceding year, couched in general terms, and merely approving the continued operation of the Federal Barge Lines and specifically recommending its continued pioneering on the Missouri and the upper Mississippi Rivers. Thereafter, the association's board of directors instructed its chairman to appoint a special committee to consider the matter and to make specific recommendations to the board, within the scope of that general resolution. That special committee was composed of the following men:

Chairman: John Prince, president of the Stewart Sand & Material Co., of Kansas City, Mo.

John A. Kerper, secretary of the Chamber of Commerce of Dubuque, Iowa.