Great Lakes destinations, while only 78,240 tons were carried to Chicago by the Federal Barge Lines.

In the war, he added, this cargo was moved inland because of German submarine activity along the coasts, but it was not returned after the war ended. Consequently, in 1946 the Government's barge line handled 200,397 tons of sulfur while not a single ton moved on the State canal, he said, and in the following year the Federal Barge Lines shipped 211,637 tons.

Mr. Byrne said other commodities affected adversely included sugar and grain.

SCORED BY HOOVER GROUP

The continued operation by the Government was opposed earlier this year by the Hoover Commission, which recommended that the Federal Barge Lines be liquidated immediately.

Other opponents of the lines' continuance have pointed out that the Inland Waterways Corporation remains a losing venture despite the fact that it is Government-owned, and supported and pays almost no taxes. These men have charged also that the private carriers are in the position of paying taxes to support a competitor that deprives them of needed traffic.

They added that the discontinuance of the Federal Barge Lines would have no adverse effect upon either the large or small users of inland waterway transportation, since adequate coverage was offered by the private lines.

Senator JOHNSON of Texas. Without objection we will insert in the record a resolution presented by Senators Hickenlooper and Gillette, a resolution by the Upper Mississippi Grain Shippers' Association, representing shippers and farmers, which was passed Friday, May 13, 1949, at Burlington, Iowa.

(The resolution referred to follows:)

RESOLUTION

At a special meeting of the membership of the Upper Mississippi Grain Shippers' Association, representing shippers and farmers, held in the Hotel Burlington, Friday, May 13, 1949, Burlington, Iowa, the following resolution was unanimously adopted.

Whereas there is now pending in the United States Senate, a bill S. 211, introduced by 15 Members of that body, which bill would provide additional capitalization for the Inland Waterways Corporation, making possible the provisions of additional funds now badly needed for the rehabilitation and modernization of the equipment and facilities of the Federal Barge Lines; and

Whereas said bill S. 211 as drafted would go to the protection of the shipping interests and farmers in the great Mississippi Valley, by reason of the Federal Barge Lines being placed in a position to perform the service as authorized by Congress in the act entitled, "An act to create the Inland Waterways Corporation"; and

Whereas 10 of those Senators have joined in sponsoring an amendment to the bill S. 211, which provisions are in part:

1. Section 2. Subsection (d) of section 3 of such act is amended by inserting before the period at the end thereof a colon and the following: “And provided further, That no part of the carrier operations of the Corporation shall be discontinued or disposed of for a period of at least 5 years following the date of enactment of the Inland Waterways Amendments of 1949."

2. Section 3. Section 3 of such act is further amended by adding at the end thereof the following news subsections:

“(g) The activities of the Corporation shall be primarily in the fields of pioneering and research in the development of its carload and less-than-carload traffic; in the development of modern and efficient public terminal facilities, open to all on equal terms, including rehabilitation and modernization of existing terminals; and in the development of all types of traffic on newly improved rivers where it is presently authorized to operate, including the Missouri River. "(h) 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."

Section 4. Subsection (a) of section 4 of such act is amended to read as follows:

"(a) The Secretary of Commerce shall appoint an advisory board of nine members (hereinafter referred to as the 'board') from individuals prominently identified with commercial or business interests in territory adjacent to the operations of the Corporation. At least two of the members shall be representatives of privately owned carriers for hire operating on the Mississippi River system, of whom at least one shall be a representative of a certificated carrier, and at least two of such members shall be representatives of less-than-bargeload shippers. No member of the board shall be an officer, director, or employee of, or substantially interested in, any railroad corporation. Each member of the board shall be appointed for a term of 5 years from the date of the expiration of the term of the member whom he succeeds, except that (1) any member appointed to fill a vacancy occuring prior to the expiration of the term for which his predecessor was appointed shall be appointed only for the unexpired portion of such term, and (2) members first appointed to the vacancies created by the Inland Waterways Amendments of 1949 shall be appointed for terms of 3, 4, and 5 years, respectively, from the dates of their appointments. A vacancy in the board shall not impair the powers of the remaining members to execute the functions of the board"; and

Whereas the objectives sought in the amendment would go to create a monopoly of transportation on the inland waterways, to the benefit of private carriers, who have not in the past, and are not performing the type of service authorized to be performed by the Federal Barge Lines; and, neither has any attempt been made to perform the service, as was created by the enactment of the act entitled "An act to create the Inland Waterways Corporation," for the purpose of carrying out the mandate and purpose of Congress as expressed in sections 201 and 500 of the Transportation Act.

The curtailment of the services of the Federal Barge Lines, would have a disastrous effect on the earnings of the Corporation and would result in the nonexistence of the Corporation, destroying our massive rate structure which has been constructed around inland waterway transportation, resulting in severe losses to shippers and our members by reason of being located on the Mississippi River, dependent upon water transportation, and would result in our Great American Farmer receiving from four to six cents less per bushel for his grains, and other products, would cost more by reason of increases in rates and charges. The curtailment of the Federal Barge Lines service would result in losses to cities who have in the past, upon the enactment of the, "An act to create the Inland Waterways Corporation"; constructed water terminals at substantial costs to the American taxpayers, and the nonexistence of the Federal Barge Lines, would immediately result in substantial increases in inland waterways rates and transportation charges, all of which shippers and farmers would in turn subsidize the private operators through the increases in rates and charges; and

Whereas the appointment of two members representing privately owned carriers, one member representing certificated carriers, would result in disastrous effects and dissention in the operation and management of the Corporation; and

Whereas hearings have been held and will reconvene in Washington the week of May 16, 1949, for those in support of the amendment to the bill, S. 211. We, the opponents, feel this matter of such paramount importance, that a time and place be set aside for your respondents to be heard in person or on brief: Be it now

Resolved, That the Upper Mississippi Grain Shippers' Association oppose the said amendment to bill S. 211, and strongly urge its nonadoption in its entirety, and that bill, S. 211, as drafted and submitted be approved at the earlier possible date: Be it further

Resolved, That copies of this resolution be sent or made available to members of the United States Senate and House of Representatives from the Midwest area, the Secretary of Commerce, Secretary of Agriculture, Federal Barge Lines, and others interested, and that they be urged to give full support to this, our resolution.

UPPER MISSISSIPPI GRAIN SHIPPERS' ASSOCIATION,
F. L. PARTRIDGE, Secretary.

Senator JOHNSON of Texas. The first witness is Mr. Howard G.
King of the Arrow Transportation Co., Sheffield, Ala.
Will you come forward, Mr. King?

The Chair wishes to again call to the attention of the witnesses that we have a number of people scheduled to appear, and if time were unlimited we would be delighted to give each witness all the time he could use. But in view of the approaching adjournment, in view of the extensive time that has been given already, I hope the witnesses will make their statements as brief as possible.

Go ahead, Mr. King.

STATEMENT OF HOWARD G. KING, VICE PRESIDENT, ARROW TRANSPORTATION CO.

Mr. KING. My name is Howard G. King. I am vice president and secretary of Arrow Transportation Co., an inland river barge line transporting commodities generally pursuant to a certificate of public convenience and necessity issued to it by the Interstate Commerce Commission in ICC Docket No. W-114. Its principal offices are in the Nathan Building, Sheffield, Ala.

I am appearing here today on behalf of all certificated common carrier barge lines serving the Tennessee and Cumberland Rivers. Those serving the Tennessee River are: (1) American Barge Line Co., Pittsburgh, Pa.; (2) Arrow Transportation Co., Sheffield, Ala.; (3) Central Barge Co., Chicago, Ill.; (4) Clifton Towing Co., Clifton, Tenn.; (5) Commercial Barge Lines, Inc., Detroit, Mich.; (6) Igert, Inc., Paducah, Ky.

Those serving the Cumberland River are: (1) American Barge Line Co., Pittsburgh, Pa.; (2) Central Barge Co., Chicago, Ill.; (3) Cumberland River Sand Co., Nashville, Tenn.; (4) Igert, Inc., Paducah, Ky.

All the companies named are common carriers operating pursuant to certificates of public convenience and necessity issued to them by the Interstate Commerce Commission. Together, either locally or jointly with other carriers, they offer bargeload service on commodities generally between all points on the Tennessee River and its navigable tributaries, between all points on the Cumberland River, and between all those points and all other points on the Mississippi River system, including the Gulf Intracoastal Canal.

Our interest here is twofold. First, we favor the passage of S. 211 as amended by the so-called Wherry amendment. Second, we are unalterably opposed to the Hill-Kefauver-Sparkman amendment which would extend the services of the Federal Barge Lines to the Tennessee and Cumberland Rivers.

Insofar as the bill

Senator JOHNSON of Texas. Right at that point, you favor the passage of Senate 211 as amended by the so-called Wherry amendment? Mr. KING. Yes, sir.

Senator JOHNSON of Texas. And you oppose the Hill-KefauverSparkman amendment?

Mr. KING. That is correct.

Senator JOHNSON of Texas. How do you reconcile the fact that a man can support the Wherry amendment and also oppose the HillKefauver-Sparkman amendment? It seems to me that the Wherry amendment restricts the operations and places them somewhat in limited bounds, yet the Hill-Kefauver-Sparkman amendment comes along and extends the service to other areas.

I can understand your position. You support the first proposal because you want them to be kept within bounds.

Mr. KING. That is right.

Senator JOHNSON of Texas. But you vigorously oppose the HillKefauver-Sparkman amendment, do you not?

Mr. KING. That is right. We oppose any extension of the Federal Barge Lines, and I think further on in my testimony I will explain the question you just asked.

Senator JOHNSON of Texas. All right.

Mr. KING. Insofar as the bill, as amended by the so-called Wherry amendment, is concerned, the position of the privately owned barge lines was set forth in the testimony of Mr. Chester C. Thompson, president, American Waterways Operators, Inc., when he appeared before this subcommittee in May. He explained then how the Wherry amendment was created and why we favor its enactment. We would add this comment to what has already been said.

Several members of this committee have expressed the fear that the Wherry amendment would force Federal to lose money-that it would give the desirable traffic to the private operators and require Federal to take that which no one else wants. That is not true. It would leave Federal free to pioneer all traffic on the Missouri River, less-thanbargeload traffic on the remainder of its line, and to keep its bargeload business substantially as it is now. Under those circumstances, its present capable management can earn a profit. That is proven by the fact that although for the calendar year 1948 it lost $1,500,000, for the fiscal year ending June 30 it is expected to show a profit of about $100,000. If present management can do that with obsolete equipment, it can certainly do better if given the funds to acquire efficient modern equipment.

Now, regarding the Hill-Kefauver-Sparkman amendment. As previously stated, we are opposed to it. S. 211 never intended that Federal's operations be extended. It intends that present operations be made profitable by modernization so the line can be sold to private enterprise. As it stands, it cannot be sold. The stumbling blocks, exclusive of obsolete equipment, are the Missouri River operations and less-than-bargeload traffic. Both would have to be maintained by a private purchaser and neither is profitable.

Yet, in on of those unprofitable services-the handling of less-thanbargeload traffic-lies the reason for the Hill-Kefauver-Sparkman amendment. No one provides less-than-bargeload service on the Tennessee and Cumberland Rivers. No one provides it because it is unprofitable. Such traffic is even unprofitable to Federal on the Mississippi where there is a fair demand for the service. On the Tennessee and Cumberland it would be doubly unprofitable because there is almost no demand.

Yet, this amendment would saddle Federal with the burden of handling that losing traffic at a time when the basic legislation here proposed intends that it do all in its power to build a profitable, salable, going concern. Where would Federal get the money to lose on this venture? The money here requested is all needed in its present operations. Therefore, it would have to get that money by taking Tennessee and Cumberland River bargeload traffic away from the privately owned carriers who now handle it. And it would take nearly all of the bargeload traffic on both rivers to do the job.

LOOK AT THE FIGURES

For the fiscal year ending June 30, Federal will have handled nearly 3,000,000 tons of freight. On the Tennesseee and Cumberland Rivers, the total water-borne tonnage in 1948, exclusive of sand and gravel, which is always handled by the producer, was only approximately 1,900,000 tons-about two-thirds the tonnage handled by Federal alone in the fiscal year ending June 30. And to handle that limited tonnage were six Tennessee River common carriers, four Cumberland River common carriers, and at least six unregulated carriers. Even if we eliminate the duplication occurring where the same carrier serves both the Tennessee and the Cumberland, there were seven regulated carriers and at least six unregulated carriers-a total of 13 carriers to handle about two-thirds the tonnage handled by Federal alone. The only way Federal could find tonnage here would be to take it from the carriers who pioneered it and are today handling it.

As my testimony up to this point indicates, there are available today both rates and service on all bargeload traffic between every point on the Tennessee, its tributaries, and the Cumberland, and every other point on those or any other waterways making up the Mississippi River system, including the Gulf Intracoastal Canal. The only thing lacking is the unprofitable less-than-bargeload service. Certainly the Government cannot intend to bankrupt existing carriers and lose its own money in order to provide a service which to date has proven unprofitable to every carrier that has tried to provide it. Yet, that is exactly what this amendment would do.

Now, in closing, just a word about my own company. Our position is different from that of some of the other carriers on whose behalf I have been speaking. Some of them are authorized to and do provide service between almost all points on the Mississippi River system, including the Tennessee and Cumberland Rivers. Our operation is more limited.

The Interstate Commerce Commission has authorized us to serve all points on the Tennessee and its tributaries and to handle traffic between those points and points on the Ohio as far up as Louisville and on the Mississippi as far up as St. Louis. We cannot operate above Louisville on the Ohio or St. Louis on the Mississipppi, and we cannot operate below Cairo, Ill., on the Mississippi. We have, therefore, joined other carriers in joint rates and routes in order to provide service between all points on the Tennessee and its tributaries and all other points on the Mississippi River system, including the Gulf Intracoastal Canal.

Among the carriers we have so joined is Federal Barge Lines. The first rates and routes in which our two lines joined became effective July 31, 1941. Today, rates and routes are in effect, service is available and all bargeload traffic offered is being promptly and efficiently handled between all points served by us and all points served by Federal between which there has been any demand for service.

As additional rates and routes are required, they are provided. Hence, on the Tennessee and its tributaries, bargeload service to and from Federal Barge Lines points is already available. And should Federal be able to develop a profitable method of handling less-thanbargeload traffic, as its present management believes it can, we stand ready, willing and able to join Federal in joint rates and routes on that traffic also.