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Donald,, engineers of New York, N. Y., submitted June 26, 1954, to Mr. Ben E. Douglas, Director, Department of Conservation and Development:

"Marinas: The word 'marina,' coined some years ago by the National Association of Engine and Boat Manufacturers, is applied to the modern boat basin with facilities for berthing all types of recreational craft, as well as providing adequate supplies, provisions, service, and means for fueling. Although sometimes used to describe such limited facilities as a single finger pier with a gas pump on the end, ordinarily it infers some or all of the following appurtenances: "(a) Berthing slips with mooring facilities including access walkways, either covered or open.

"(b) Fueling stations.

"(c) Water and electric outlets at the slips.

"(d) Repair shops, marine railway, and spare parts.

"(e) Toilets, showers, telephone, garbage disposal, ice.

"(f) Stores, shops, restaurant, lounge, or club.

"(g) Theater, playgrounds, or other recreational facilities.

"(h) Landscaping, parking lot or waterfront park.

"(i) Adequate personnel to man facilities and service the craft.

"One of the most phenomenal expansions since World War II has been that of the pleasure craft industry, sales having more than doubled during the postwar period. In January 1953 Life magazine reported that boating was dollarwise, America's most important recreation. Even then there was 1 boat for every 32 persons in the United States or about 5 million craft if the smallest types are included. The provision of moorings, slips, and storage space has lagged far behind this trend. It was estimated that their number could be doubled without meeting the demand. In many cities boat dealers cannot sell cruisers unless they can provide a slip for the purchaser. The past year has seen this increase accentuated throughout the country with similar reports coming from the coastal areas of North Carolina.

"In 1951 there were about 2,400 documented (5 net registered tons or larger) craft in North Carolina; more recent data are unavailable. In addition, it was reported * * * July 28, 1954, that there were 8,932 smaller boats registered in the State. From the same source information was obtained that there are about 5,000 transient craft from other States that travel through the coastal waterways. Attempts to verify the latter figure indicate that it is considerably high. The 1953 total of north and south bound pleasure craft passing Carolina Beach draw span was 2,295 and this may have included some local vessels. However, there is a definite upward trend in this traffic, with a 23 percent increase since 1950.

"The heaviest southbound traffic occurs in October and November and northbound in April and May, with three and four hundred passages in a single month. Most of the smaller boats use the Dismal Swamp route and following the Intracoastal Waterway they have marina or similar services available at Elizabeth City, Belhaven, Hobucken, Morehead City, Beaufort, Swansboro, Wrightsville, Carolina Beach, Wilmington, and Southport. The long intervening stretches between these points offer little in the way of service to the throughbound yachtsman. There are a few marinas or small-boat basins at other points off the Intracoastal Waterway such as New Bern, Hatteras, Ocracoke, and with minimum facilities at Manteo, Oriental, and other locations.

"There is a real need for additional installations and expanded services throughout the area ***.

"The entire field of pleasure-craft facilities is highly important to the future development of eastern North Carolina and could well be made the subject of a separate and detailed investigation."

The source of this statement is a public document entitled, "Report on Survey of North Carolina Inland Ports and Waterways, prepared for the Department of Conservation and Development; Parsons, Brinckerhoff, Hall & MacDonald, Engineers, New York, 1954."

We believe the factual data reported by a reliable engineering firm as set forth in the appendix wherein is described the situation respecting the inland waterway in the State of North Carolina when considered as illustrative of many other States will serve to rebut the statement, that only a minor number of persons would be adversely

affected by the imposition of a user charge except for smaller pleasure craft.

Recommendation No. 8, that Congress authorize a user charge on inland waterways except for smaller pleasure craft, is also based, as stated in the text, on the assumption that the current long-standing practice constitutes a special privilege, mostly to large shippers of bulk commodities. Transportation experts disagree among themselves on many points relating to the questions and problems which arise in connection with their chosen field of endeavor. However, there is unanimity of opinion among such experts that all freight charges in the final analysis are borne by the ultimate consumer; and, allowing for certain valid exceptions to that proposition, it would then appear that inland waterway transportation would inure in some degree to the benefit of millions of consumers.

The report (p. 81) refers to the broad picture of our inland waterways as three separate but integrated systems; first, that of the Great Lakes; secondly, that of the great Mississippi River drainage system; and the third as our inland coastal canals. The entire, yet incomplete, system is of tremendous concern to the State of North Carolina. However, reference to the latter component of the entire system as inland coastal canals, being closest to home, gives rise to what we hope is needless anxiety for the reason that later on in the text (p. 85), in referring to a user charge, it is stated :

*** such a charge even of small dimensions would quickly demonstrate which waterways have now become obsolete service and thus indicate those where the cost of maintenance and operation could be eliminated.

Obviously under such results the system as a whole, including that portion of it which fills a definite realistic need along our coast, would surely disintegrate.

Most of us have heard the story about how in the State of Louisiana some years ago there was only enough money available to pave a limited number of highway miles, and in order to double that limited number of miles within a short period it was decided to pave a short stretch, then skip over and leave the highway unpaved for a similar distance, then pave another stretch, after which the next short distance would be left unpaved, and so on. The result was, of course, that the highway users raised such a howl that the intervening unpaved stretches were soon properly paved and connected up with the paved segments.

The Louisiana scheme of acquiring an extended improved highway system was at least some sort of progress, but we are hard put to understand the motive for applying that scheme in reverse to disintegrate rather than retain that which is already well on the way toward integration and implementation of the entire national transportation system.

On page 84 of the report under the caption, "A User Charge on Inland Waterway Traffic," the brief discussion there refers to the absence of any distinguishing fact, theory, or principle to support user charges for the Panama Canal which does not equally support user charges for inland waterways. May we suggest to the committee that distinguishing facts, theories, and principles most certainly exist for tolls to transit the Panama Canal which do not support the recommendation of a user charge for inland waterways. The charge

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for transiting the Panama Canal is the result of international policy and treaty obligations of fairly recent origin, whereas the national or domestic policy and tradition respecting inland waterways has remained as it is today for upward of two centuries. We urge upon this committee that it heed the words of Solomon when he admonished, "Remove not the ancient landmark, which thy fathers have set." (Proverbs 22, 28.) Or in this particular situation it might be said, "Remove not the ancient watermark."

There can be little doubt that inland waterway routes contributed materially to the vast industrial development in the Pittsburgh area and that the Warrior-Tombigbee waterway system facilitated expansion of the Birmingham, Ala., area. While industrial growth in the North Carolina coastal plain area in the inland waterway region has not reached such large proportions, there has been a definite expansion along the waterway area in recent year, and we believe that any lessening of the transportation services now available would retard that trend. Elimination of or reduction in service now available on our coast by the inland waterway would slow up the decentralization of industry under the private enterprise system. Existing industry would be deprived of a service, the availability of which was a determining factor in selecting present locations. Port terminals for handling cargoes, consisting principally of bulk commodities, would rapidly depreciate; and carrying equipment, work boats, barges, et cetera, would fall into disrepair. Transportation service to and from a number of our towns would become a serious problem.

Here, again, we wonder about the floating equipment of the Federal Government now seen on our coastal inland waterway and the absence in the user charge recommendation of any reference whatsoever to the national defense. The inland waterway reaches the fringe of the large, permanent, active Army post of Fort Bragg, near Fayetteville. Recent press releases announce the construction of a turning basin at Camp Lejeune, a large United States marine base, on the inland waterway. This new adjunct of the base is described as the latest step in the improvement of training facilities involving LSM (landing ship, medium) craft.

Just last week in Washington before the transportation and communications subcommittee of the House Committee on Interstate and Foreign Commerce, Arthur S. Flemming, Director of the Office of Defense Mobilization, stated that full mobilization could very easily increase the aggregate demand for domestic freight transportation by some 20 percent, expressed in ton-miles. "The transportation system must be capable of absorbing this overload rapidly or we lack an adequate mobilization base in a most vital segment of our defense economy," said Mr. Fleming.

Surely, continued operation of the inland waterway is worthy of serious consideration as a cushion for the impact of increased transportation needs which, as indicated, would arise from full mobilization. We believe that continuation of the time-honored practice of maintaining our inland waterways as a complementing part of the national transportation system is a better method of contributing to the standby service for possible mobilization than that which may be devised for other forms of transport at the taxpayers' expense.

We urge that you not translate Recommendation No. 8 into proposed legislation.

Mr. JONES. Thank you very much, Mr. Nicholson.

Mr. NICHOLSON. Thank you, sir.

Mr. JONES. Do you have any questions, Mr. Lipscomb?

Mr. LIPSCOMB. Mr. Nicholson, do pleasure craft or other craft which are using the inland waterway pay either a Federal or State gasoline tax?

Mr. NICHOLSON. They pay a State tax, most of them.

Mr. LIPSCOMB. They pay no Federal tax on gasoline?

Mr. NICHOLSON. Well, they do. I think 1 cent or 114 cents Federal tax is included in the tax they pay. Two cents it is.

Mr. LIPSCOMB. In some States the State law even allows them to get a refund on the State tax they pay on gasoline.

Mr. NICHOLSON. I believe that is right.

Mr. LIPSCOMB. Just for my own information, why is it that the marine engines and pleasure craft do not pay a gasoline tax such as a highway tax; an oil tax or gasoline tax could be considered a user tax for the waterways?

Mr. NICHOLSON. I am not sure I understand that.

Mr. LIPSCOMB. I mean, everybody who uses the highways pays a gasoline tax. They take that tax money in theory and put it into highways. What is the difference between that theory and charging a gasoline tax for boats, and then putting that tax money into the improvements on the inland waterway?

Mr. NICHOLSON. Of course, the inland waterway and the highways and airways and railroads are all separate and distince modes of transportation. I don't know that I am prepared to go into all of those things of such long-standing practices which constitute a basis for those differences which have existed and which do exist today. I just do not think I am in a position to go into that. I will be glad to get you some data on it, but I have not studied that particular aspect of it.

But there is a difference, of course, in the type of highways

Mr. LIPSCOMB. Yesterday the same question came up and it was kind of interesting to me. I was wondering what the difference is in the theory that waterway people who use gasoline on their boats and use waterways do not pay Federal and States taxes, and why such tax money could not be used to improve and help the inland waterway?

Mr. NICHOLSON. According to the report itself, the implication there is if you put a tax on it then the inland waterway would disintegrate. That is the way I read their report, and I suppose it is based on factual data that the Commission got together. That is very clear to me.

Mr. LIPSCOMB. I have no opinion on it at all.

Mr. JONES. On that point, Mr. Nicholson, at the present time all users of gasoline and diesel fuel pay a Federal tax.

Mr. LIPSCOMB. Yes, sir.

Mr. JONES. That gasoline tax now runs to about $1 billion a year. Mr. NICHOLSON. Yes, sir.

Mr. JONES. The marine users of diesel fuel and gasoline are paying a Federal tax, to be expended on the construction and maintenance of roads.

Mr. NICHOLSON. That is a fact. It is done, I am sure of that, to the full extent.

Mr. JONES. Aviation gasoline is taxed the same as marine fuel. They do not benefit directly from the construction of roads, do they? Mr. NICHOLSON. No, sir.

Mr. JONES. But they pay a Federal tax that goes more for road construction?

Mr. NICHOLSON. That is correct.

Mr. JONES. Off the record.

(Discussion off the record.)

Mr. JONES. On page 3 of your statement, concerning recommendation No. 7, which would permit the deauthorization of projects that were not considered economically feasible, or were of such nature as to put them out of date, you make the plea that public hearings be held. To what extent would you require those public hearings?

Mr. NICHOLSON. Well, prior to the authorization by Congress of such projects, public hearings in most cases were held by the engineers. Mr. JONES. That's right.

Mr. NICHOLSON. It seems to me the Corps of Engineers, in my experience with them, have been very thorough in estimating the need, or the necessity of going into a project, before they recommend it for authorization. They have been very thorough. It is not just one of these things that slips through. It receives a lot of careful attention before it is presented to Congress for authorization.

It seems to me that the same sort of care, if it is going to be rescinded, should go into it before it goes to Congress, in somewhat the same manner as it went there originally.

Mr. JONES. Do you not think Congress itself will be a proper forum to decide whether or not the projects should be rescinded?

Mr. NICHOLSON. I think Congress would in the final analysis, but probably the Corps of Engineers should hold these hearings before it gets back to Congress on a recommendation for rescission. Probably some of these field hearings should be held which they do hold on these projects before they are authorized by Congress. Congress, in the final analysis, certainly would be the proper forum.

Mr. JONES. The report is given by the Corps of Engineers to the Congress as to the status of the project. We have expanded some $42 million on projects, and on surveys and plans of projects, and in some instances we have spent more money on the planning of the project than the project itself cost, and the project was never completed. Mr. NICHOLSON. Yes, sir.

Mr. JONES. It seems to me there is merit to your position.

Mr. NICHOLSON. Yes, sir. I meant to state, and I believe I did not make it clear, although I certainly intended to do so, that in the final analysis Congress is the final authority which would rescind any project which it initially authorized itself. I think that is logical. Mr. JONES. On page 4 of your statement in regard to recommendation No. 8, would you mind going into the mechanics as to how you set up a scale of tolls and exceptions thereto?

Mr. NICHOLSON. Well, Mr. Chairman, that is very complicated. I made a study of it and just limited it to the certain time limitations I had, but it is very complicated. I have no "open sesame" theory on it, and I have not seen one proposed by the outstanding experts in this country, and I have read some of the authorities on it. It looks like a real problem within itself to me.

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