At the recent Senate committee hearings on S. 211, Senator Long, of Louisiana, said (tr. 37), in effect, that the Inland Waterways Corporation is the only carrier that will provide a less-than-bargeload lot shipment— and that other carriers cannot handle profitably. load lots. * * anything in less-than-barge At the same hearing, Mr. Chester C. Thompson, president, American Waterways Operators, Inc., testified (tr. 258) that under the present techniques freight on the rivers, it is not profitable. in the handling of less-than-bargeload The same witness went on to say (tr. 288) that the tendency has been toward bargeload business for the past 10 years; that it has become more marked every year; that prior to that some of the bargeload companies did a rather sizable business in less-than-bargeload quantities, but that they made no money on that traffic and (tr. 289) The private lines have been gradually getting out of less-than-bargeload business because it was unprofitable. Why should the taxpayers of this country be expected to continue, at enormous public expense, an experiment which, after 25 years of experimentation, has proved unsuccessful? These bills (H. R. 328, H. R. 429, and H. R. 4978) would intensify the subsidized, inefficient and utterly unfair competition of the Inland Waterways Corporation, with the railroads and other forms of transportation which pay their own way. All operators of barges on the navigable inland waterways enjoy an unfair competitive advantage over the railroads. To cite only two examples: The railroads own and maintain their right-of-way, and pay taxes on it, whereas the barge operators use, free of charge, a right-of-way provided and maintained, at considerable expense, by the Government. Likewise, the railroads own and maintain their signal systems, whereas the Government provides for the barge operators, at the expense of the taxpayer, costly aids to navigation, meteorological data, and so forth. These hidden subsidies create unfair competition for the railroads, but at least all barge operators, except the Inland Waterways Corporation, must meet the other costs of conducting their business operations. They must pay taxes, interest on investment, and otherwise conduct their operations upon a business basis. The Inland Waterways Corporation, on the other hand, not only shares all the hidden subsidies enjoyed by the private barge operator, but likewise avoids interest, taxes, and other expenses incurred by private enterprise, and still cannot pay its way. One of the most vicious aspects of this destructive competitionand perhaps one of the reasons for the mounting deficits of the IWCis the low level of rates maintained by that company. It may be doubted that these rates are economically justified, because the Interstate Commerce Commission, in a report dated July 7, 1948 (Rail and Barge Joint Rates, I. C. C. Docket No. 26712), said: * * * we cannot find that at the present time there are demonstrable economies in barge-rail transportation on the Mississippi River and its tributaries, including the Warrior, which from the standpoint of cost of service would justify differentials. It is significant, too, that much of the political hue and cry for barge transportation, and for the pork-barrel projects which make it possible, are the result, not of a need or desire for such transportation, but rather the result of an effort to use barge transportation as a club to force railroad rates downward to a near-starvation level. For example, the Interstate Commerce Commission, in its report of July 7, 1948, mentioned above, said: The interest in joint barge and rail transportation among shippers in the Mississippi Valley seems to relate not so much to an expansion in transportation. facilities as to the influence of barge service on rates. The picture nears completion. Starting with what was intended to be a 5-year experiment beginning in 1924, the Inland Waterways. Corporation, notwithstanding the fact that it pays no interest or taxes, and enjoys many free services at the taxpayers' expense, including a right-of-way provided and maintained at Government expense, has accumulated a deficit of over $15,000,000 and in the last fiscal year of its operation incurred an operating deficit of $2,312,341 It is now suggested that Congress authorize an additional investment of $18,000,000, so that it can curtail the profitable part of its operations and expand those which are unprofitable; and all this would be done, not only at the expense of the taxpayer, but by applying a further squeeze on the American railroads, the only agency of transportation which pays its own way, without subsidies of any kind; which operates, rain or shine, 365 days per year; and which is admittedly the backbone of our transportation system, in both war and peace; and which is the last refuge of those who favor unsubsidized private enterprise in transportation. Congress should reject those bills, as well as all other which con-template further expenditure of public funds for subsidized competition on the inland waterways of the country, and should promptly take such steps as may be necessary to bring about immediate liquida-tion of the Inland Waterways Corporation. Mr. Chairman, that is all of the prepared statement, but after preparing this statement I heard the remarks of the Secretary of Comaerce; and with the permission of you and the committee, I would like to add a short table which shows the adverse effects which Government subsidization has had upon railroads and upon their employees, as reported by the Interstate Commerce Commission. I mention this because he stated that the railroads had improved their physical condition between the First World War and the Second World War, so as to handle the traffic. I am not in agreement with the Secretary. And the table appears to show that there were less miles of railroad, fewer locomotives, fewer cars for the handling of freight, and that a much higher ton-mile movement was made. It is my private opinion, publicly expressed, that the railroads did a better job in the Second World War than was done in the First World War, because the railroads were permitted to operate their own properties by_railroad men. That didn't occur in the First World War. I am sincere in the belief that the Government has the same inability to run barge lines that it had and has demonstrated to run the railroads.. That is all. Mr. BECKWORTH. The table you refer to will be made a part of the record. Mr. BECKWORTH. We certainly do thank you for your statement, Mr. Corbett. Mr. CORBETT. Thank you. Mr. BECKWORTH. We shall insert in the record at this point the statement of W. D. Johnson, vice president and national legislative representative, Order of Railway Conductors of America. (The statement referred to is as follows:) STATEMENT OF W. D. JOHNSON, VICE PRESIDENT AND NATIONAL LEGISLATIVE REPRESENTATIVE, ORDER OF RAILWAY CONDUCTORS OF AMERICA Mr. Chairman and members of the committee, my name is W. D. Johnson. I am a vice president and national legislative representative of the Order of Railway Conductors. I reside in Washington, D. C., and maintain an office at 10 Independence Avenue. The headquarters of the Order of Railway Conductors is located in Cedar Rapids, Iowa. I appear on behalf of the Order of Railway Conductors in opposition to the proposal to increase the capital stock and expand the operation of the Inland Waterways Corporation as provided in H. R. 328, 429, and 4978. Our opposition to this legislation is not based solely on the question of subsidized transportation in competition with the railroads. Our primary opposition is from the standpoint of taxpayers. The Inland Waterways Corporation was organized in 1924 and was originally looked upon as an experimental project. However, to date the records show that it has proved to be a very unprofitable experiment from every viewpoint. Twenty-five years of unprofitable operation of the Federal Barge Lines should convince the Congress that the waste of $18,000,000 dollars of additional Federal funds in a project of this kind cannot be justified in any sense of the word. In other words, the Congress should not permit the throwing away of $18,000,000 in an effort to salvage a project that the records clearly show has been a Federal liability since its inception. Economy in the use of Federal funds appears to be the watchword at the moment. Therefore, in my judgment, this committee now has an excellent opportunity to convince the taxpayers that it is deeply concerned with respect to conserving Federal funds, to the end that it will render an unfavorable report on H. R. 328, 429, and 4978. Mr. BECKWORTH. It seems there are still some witnesses who have not had an opportunity to appear, and I believe, from what the clerk told me, we shall not have an open date until June the 23d. I realize, Dr. Parmelee, that you have been very patient. The reason we did not call you this afternoon was because you do require considerable time. We shall look forward, though, to having you mighty soon after we assembly on the 23d, as well as some three, four, or five other witnesses. The committee will adjourn until the 23d at 10 o'clock. (Thereupon, at 4:10 the committee recessed to reconvene at 10 a. m., June 23, 1949.) INLAND WATERWAYS CORPORATION THURSDAY, JUNE 23, 1949 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE OF THE COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, Washington, D. C. The subcommittee met, pursuant to adjournment, at 10 a. m., in room 1334, New House Office Building, Hon. Lindley Beckworth (chairman of the subcommittee) presiding. Mr. BECKWORTH. The committee will come to order, please. The first witness we shall have in our resumption of hearings with reference to H. R. 328, 429, and 4978, is Representative E. C. Gathings of West Memphis, Ark. It is my very definite knowledge that Repreesntative Gathings has evidenced much interest in the welfare of his own fine section of Arkansas and we certainly shall be delighted to have his viewpoints in regard to this legislation. Mr. Gathings. STATEMENT OF HON. E. C. GATHINGS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ARKANSAS Mr. GATHINGS. Thank you, Mr. Chairman, and I appreciate indeed an opportunity to appear before your committee this morning. I represent the district along the Mississippi River some 150 miles in eastern Arkansas-11 county district-and, may I say that in my district is located the only seaport city in the State of Arkansas and the only river and rail terminal facility on the west bank of the Mississippi River from St. Louis on down to New Orleans. Now, the people in Helena and throughout the State of Arkansas as well as all States in the Southwest, are vitally concerned and most interested in the passage of this particular proposal which is now before your committee. Now, as to the capitalization, I am just not well versed on the amount of capitalization that would be required for the Inland Waterways Corporation; whether or not the full $33,000,000 is required I cannot answer that, but I do know that the system of Federal Barge Lines needs to be rehabilitated. As to the rates that are saved on commodities grown in my State, there is no question. As I understood, the passage of the original Inland Waterways Act was somewhere about 1920, in which Congress adopted the policy that the river facilities should be made available to the people of America. Now, Mr. Chairman, I am interested in the passage of this 221 93555-49- -15 |