my position. I think the Inland Waterways Corporation made a terrific mistake.

Mr. WOLVERTON. That may be. I do not think that we had the benefit of your appearance last year before the committee.

Mr. BOGGS. Unfortunately, no; I was not invited.

Mr. WOLVERTON. We did not have the viewpoint you are expressing this morning presented to us last year because the emphasis was on the other side as I have mentioned.

Mr. SULLIVAN. There is a possibility that the question that I am going to ask has been answered. You were speaking about the lack of firm offer. It occurred to me perhaps one of the reasons why those ordinarily who would be interested in buying such a line did not make such an offer was because they were unwilling to assume the obligation of carrying on the service which was established by the Inland Waterways and which was a condition absolute to the sale of the barge lines. Now, maybe that question has been answered in the discussion. If you have not answered it, you have come close to it.

Mr. BOGGS. I cannot answer that question. I do not know what was in the minds of those people.

Mr. SULLIVAN. It is a possibility.

Mr. BOGGS. I think certainly it is a possibility, and possibly a fair assumption.

Mr. WOLVERTON. Certainly this committee endeavored in its consideration of the subject last year to make certain that in the event there was a sale that it would not be to the detriment of the shippers in the area covered by the operations of the Inland Waterways Corporation.

Mr. SULLIVAN. I am sure of that, but unfortunately, I was not on the committee.

Regarding the question of the change in the law, before such bid was made, it would be interesting for us to know just what particular part of the law they wanted changed before the prime offer was to be made.

Mr. O'HARA. Mr. Chairman, I would like to say that my distinguished colleague is affectionately known and respected very much. by the Members of the House and I hope if this bill goes through any new barges, or any steamers will be named the "Hale Boggs."

Mr. WOLVERTON. And let us hope that it will not bog down. Mr. O'HARA. Mr. Boggs, I should like to ask you this: With reference to the practical situation, and with reference to what my colleagues, both Mr. Wolverton and Mr. Sullivan have said, the conclusion is that there is a very important question for the Congress to consider here, and for this committee to consider, and that is the service to the shippers of the area served, certainly from Minneapolis to New Orleans.

I can appreciate perhaps in the proposal of sale involved here, without any reflection or intended reflection upon anybody, that there are probably many things to be considered, of which I certainly do not have all the facts presently before me.

Mr. Boggs, in your consideration of this problem let us say that the inland waterways are forgotten. Do you contemplate the possibility of private interests, other barge lines, or a new barge line taking over and carrying out and furnishing the service to the shippers of the area affected? Is that a possibility or an impossibility?

I have in mind also the terminal facilities which are equally important to the actual operation of the barge line.

Mr. BOGGS. Mr. O'Hara, I think that that is a possibility, but I do not think it is a probability. Certainly, in certain types of service which are vitally important, particularly the small shipper, I think it is almost an impossibility, and that is for less-than-bargeload cargoes, which, of course, is a substantial part of the business of Federal. I just do not think it is profitable enough for private operators to engage in it; not at this time.

In addition that I think that the so-called pioneering services, which to my way of thinking, are as important as any, probably would be just completely abandoned and forgotten, so the development of new routes, a new business, a new territory which would ultimately add to the greater wealth of the transportation systems, and the services in our country, would gradually lag behind. I am not competent really to give you any technical opinion on that sort of thing. I think the private people are here. I have complete confidence in them. Mr. Thompson is a very close friend of mine and a fine gentleman. I think that he would give you an honest answer to that question.

Mr. HARRIS. Mr. Chairman, may I also compliment the gentleman, our esteemed colleague from the great city of New Orleans, La. Mr. BOGGS. I appreciate very much the kind expressions of my friends and colleagues.

Mr. HARRIS. I want to congratulate him upon the manner in which he has presented his testimony. This matter has been of concern for a period of years.

I should like, however, if you would, Mr. Boggs, to have you explain the difference in the proposed bills here, and briefly tell us what the new bill would do that the original bill would not do?

Mr. BOGGS. Do you mean H. R. 4978 as compared to H. R. 328? Mr. HARRIS. Yes; and the reasons.

Mr. BOGGS. H. R. 328 simply provided for the authorization of additional stock to provide funds for rehabilitation of the Inland Waterways Corporation, and it increased the amount from $15,000,000 to $33,000,000, or a total of $18,000,000.

Mr. HARRIS. And the bill introduced by our esteemed colleague from Alabama, similar to the one originally introduced by you, simply expands the service to certain streams?

Mr. BOGGS. As I understand that bill, it is identical to H. R. 328 except that it provides for the extension of service on the Tennessee and Cumberland Rivers.

Now, H. R. 4978 is identical to H. R. 328 through section 2.

Mr. HARRIS. I observed that.

Mr. BOGGS. Or rather, through section 2 down to section (2). From there on there are provisos written in which have been worked out jointly by the various interests involved, and which I think are entirely satisfactory, and which have been also introduced in the Senate.

It provides, for instance, for the enlargement of the Advisory Board and the appointment of individuals who represent the private carriers, on that Board. It provides, as much as possible, for the elimination of unfair competition by Federal with private operators

and more of less outlines the policy of Congress in connection with the Federal Barge Lines.

Mr. HARRIS. Does it make any particular reference to service for less-than-bargeload lots?

Mr. BOGGS. Yes, I think so.

Section 3 (g) reads:

The activities of the corporation shall be primarily in the field of pioneering and research in the development of its carload and less-than-carload traffic ** * That is the only reference to the less-than-carload traffic.

Mr. HARRIS. Does it restrict the corporation in any way on bargeload lots?

Mr. BOGGS. Well, section (h) reads as follows:

Except with respect to traffic in grain and soybeans and traffic originating at or destined to points on newly improved rivers, including the Missouri River, the corporation shall not substantially expand its bargeload traffic where privately owned barge lines and terminals are ready, willing and able to provide adequate service.

Mr. HARRIS. The purpose then of the restricted amendment, as I observe, is to develop particularly the less-than-bargeload lots in order to provide the service for smaller shippers.

Mr. BOGGS. I think that is a fair statement.

Mr. HARRIS. Thank you very much.

Mr. BECKWORTH. Are there any further questions? If not, we thank you very much, Mr. Boggs.

Mr. BOGGS. Mr. Chairman and members of the committee, I am very grateful to you for this hearing.

Mr. BECKWORTH. If there are no further questions, the next witness will be Representative Jones of Alabama, who is the author of one of the bills, H. R. 429.

STATEMENT OF HON. ROBERT E. JONES, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ALABAMA

Mr. JONES. Mr. Chairman, in view of the fact that Congressman Boggs' bill and the one that I have introduced have a common purpose, the increase in the capital stock of the Inland Waterways Corporation, although mine goes a little bit further, to make the services available to the Tennessee and the Cumberland Rivers, for the purpose of logical continuity of the hearings, I would like to save my appearance until you have concluded the hearings on the original bills as introduced by Mr. Boggs, if it is not out of order.

I have with me, Mr. Chairman, Mr. A. J. Wagner, Chief of the Navigation Transportation Branch of the Tennessee Valley Authority, who will be available any time that the committee has concluded the witnesses either for or against the Inland Waterways Corporation. Mr. BECKWORTH. What is his name?

Mr. JONES. Mr. Wagner.

Mr. BECKWORTH. Has he requested to appear?

Mr. JONES. No; he has not requested time. I did not know that Mr. Wagner was going to be in until this morning.

Mr. BECKWORTH. Do I understand that he would like to have some time?

Mr. JONES. If it is at all possible.

Mr. BECKWORTH. If you do not mind, have Mr. Wagner see the clerk of our committee, and if we can possibly accommodate him, we certainly will.

With reference to your request, you desire to be heard when? Mr. JONES. At the conclusion of the testimony on both bills. Inasmuch as it would be a repetition for financing by other witnesses with respect to increase in the inland waterways

Mr. BECKWORTH. It is my understanding that we are, in effect, holding hearings on all three of these bills at the same time or simultaneously.

I would suggest that you talk with our clerk, state to him when you would like to be heard. We certainly will try to accommodate you in that connection.

Mr. JONES. Thank you; I will be available, Mr. Chairman, and I hope that I am not imposing upon the committee by making such a request.

Mr. BECKWORTH. We shall be delighted to hear you.

Mr. JONES. I thought it would be of advantage to the committee to go into that phase of the bill without going into all of the aspects of the proposals.

Mr. BECKWORTH. We shall be delighted to hear you whenever you would like to be heard.

Mr. JONES. I think that that would save time for the committee. I appreciate the fact that you have a great number of witnesses from out of town and certainly I do not want to impose on their time, because I am available at any moment.

Thank you very much, Mr. Chairman.

Mr. HARRIS. Mr. Chairman.

Mr. BECKWORTH. Mr. Harris.

Mr. HARRIS. I would like to ask my friend and colleague a question, which will take but a minute, in order to clarify in my mind one point he has mentioned, and certainly we will all be looking forward to having his most valued statement at a later time with reference to this program.

As I understand, the difference in your bill and the one proposed by Mr. Boggs is that you propose to extend services to the Tennessee and Cumberland Rivers.

Mr. JONES. Yes, sir.

Mr. HARRIS. Is the Federal Barge Line restricted at the present time to certain rivers?

Mr. JONES. It is, Mr. Harris, under the authorization act of 1924, which defines its area of operation.

Mr. HARRIS. What rivers is it restricted to?

Mr. JONES. As I recall, it is certain portions of the Mississippi; I believe to the Alabama and the Warrior, and I believe to the Illinois River and the Missouri River, as I recall.

In other words, there was in the original bill an attempt to create a corporation to render the type of service that the Inland Waterways Corporation has carried out for the purpose of establishing a need for private common carriers, that were willing and able to render the type of service that was the objective of the bill, in the original authorization.

Mr. HARRIS. Does it go to the Ohio River?

Mr. JONES. No, sir; I do not think its operation extends beyond the confluence of the Mississippi and the Ohio Rivers, as I recall it. Mr. HARRIS. Your bill would not extend it any further than the confluence of the Mississippi and Ohio Rivers?

Mr. JONES. No; it would not. I have given thought to what confinement should be made to the activities of the Inland Waterways Corporation, particularly with respect to these two rivers, because they have become available, so to speak, to water transportation by the construction of the numerous dams and navigable channels from the confluence of the Ohio and the Mississippi, and the Tennessee River, 651 miles, with a 9-foot channel to Knoxville, Tenn., and those services at the time the Inland Waterways Corporation was created would not have been a practical venture for operations on the Tennessee and the Cumberland Rivers.

Mr. HARRIS. You would not have any serious objection to it being extended to the Ouachita through Louisiana and Arkansas, would you, in case this bill were to be reported?

Mr. JONES. Well, of course, I do not know what the situation might be on those rivers. I do not know what handicaps it might present. If it would immeasurably aid an investment of the Federal Government, as it has in the investment of the Federal Government in the Tennessee and Cumberland Rivers, to create economical opportunities for the people that reside in that area, then of course I would be for it, Mr. Harris.

Mr. HARRIS. Thank you.

Mr. JONES. Thank you.

Mr. BECKWORTH. The next witness will be Mr. Fred H. Smith, Assistant Director, Corporation Audits Division, General Accounting Office. Mr. Smith.

STATEMENT OF FRED H. SMITH, ASSISTANT DIRECTOR, CORPORATION AUDITS DIVISION, GENERAL ACCOUNTING OFFICE, WASHINGTON, D. C

Mr. SMITH. Mr. Chairman, my name is Fred H. Smith, Assistant Director, Corporation Audits Division, General Accounting Office. I have a short statement here that is a representation of the General Accounting Office.

1. Whether or not the functions of the Inland Waterways Corporation are to be continued or extended, as is proposed in H. R. 4978, is a matter for determination by the Congress concerning which the General Accounting Office has no occasion to take a position. That of course is a policy question. And we wish now specifically to disclaim responsibility for the statement that "The General Accounting Office also has recommended that the Government withdraw from the (Inland Waterways) business," appearing on page 64 of the report on Federal Business Enterprises submitted to the Congress March 31, 1949, by the Commission on Organization of the Executive Branch of the Government.

The General Accounting Office audit reports on Inland Waterways Corporation for the fiscal year 1946 commented that the Corporation was at a crucial point in its existence. That is even more true now. Equipment is antiquated, and much of it must be replaced if the Corporation is to operate with reasonable efficiency and economy.