Resolved, That in the interests of national defense, and to protect the investments of the people of the United States, the Federal Barge Lines be maintained and extended as an agency of the Federal Government; and be it finally

Resolved, That the General Council of River Workers hereby instructs all of its locals and their members to bring this issue before their Congressmen immediately in order to effect the policy outlined herein.

GROSS INCOME OF INLAND WATERWAYS CORPORATION

Now, I have spoken to you about and given all of the revenues that the Inland Waterways Corporation received. Last year the total gross income of the Corporation was eight-million-eight-hundred-andsome-odd-thousand dollars, of which $1,105,000 was net revenue.

If we gave that $8,000,000 to the railroads of the United States, they could not possibly earn the amount of money we earned out of that revenue, because our transportation facilities and their operations are much cheaper; but suppose they could earn $1,105,000. The valuation of the railroads as given here is $26,000,000,000. What additional return upon that $26,000,000,000 would $1,105,000 be? A very small fraction of

a

small percent.

TERMINAL FACILITIES

Now, I have spoken about the relation we have with various railroads and the terminal relations. I have shown you in the picture this morning some of these various terminals we operate and lease. They run anywhere from $450,000 to $10,000,000 invested in these terminals, and they were all investments based absolutely on the assurance of law that this corporation would continue its business until such time as it could be passed over to private ownership under certain fulfilled conditions.

These were all voted by the people; these bond issues were all voted by the people. They were not particularly urged by the Inland Waterways Corporation to build these terminals but were informed they could get no benefit without terminals. The only return they get is from a contract which they have with the Inland Waterways Corporation which provides that for every ton of freight handled through one of those terminals we pay the cities 15 cents a ton and we maintain those terminals in excellent condition, pay the expenses of operation, and return the property in as good condition as when we received it, ordinary wear and tear excepted.

What will happen if this Corporation is discontinued to all of those cities along the system? They will get no return upon their investment. They will become dead horses.

What will happen to all of our joint rail-water rates? We have relations with 176 railroads and many joint rates which give to the people of the interior the same saving in cents rate per 100 pounds as the man along the river secures. They will be wiped out.

What is the tendency today? Today the rates in the interior are increasing and the rates along the rivers are decreasing, as a general rule.

Further than that, the question has been asked from time to time as to whether we have benefited anybody in the interior.

I want to report to this committee that 65 percent of all of the traffic that we carry originates in the interior or is destined to interior points which are not upon any river.

As just a little illustration of what I mean, we have our territory divided into the northern district, the western district, the southern district, and the eastern district.

Now, the Chicago district is the headquarters of our northern district. As an illustration of what we handled in that territory during the last year, there were 36 cities served in Illinois, with 419 shippers: Forty-nine cities in Indiana, 106 shippers; 16 cities in Iowa, with 34 shippers; 46 cities in Michigan and 94 shippers; 17 cities in Minnesota and 78 shippers; 2 cities in Montana and 2 shippers; 4 cities in New York and 6 shippers; 43 cities in Ohio, 103 shippers; 9 cities in Pennsylvania and 17 shippers; 7 cities in West Virginia and 12 shippers; and 96 cities in Wisconsin, with 171 shippers.

Or through this territory alone, through the Chicago office, there were 325 cities served and 1,042 shippers.

Now, that fact shows that the benefits do go back to the people of the United States who are not located on our rivers.

BENEFITS TO THE PEOPLE FROM OPERATION OF THE CORPORATION

I would like to cite you some of the benefits the Corporation is extending and how it has to act to meet emergencies, and just why no private corporation would act exactly as this Corporation does.

Under normal conditions we may be said to limit our operations to our regularly established terminals. When an exceptional movement develops, as in the case of grain in the year just past, these terminals prove inadequate to meet requirements and we are called upon to expand our operations in the interests of the shipping public.

Concrete evidence is afforded by the fact that during 1938 we handled grain from 17 points where our Corporation has no terminal facilities, viz: New Madrid, Mo., Pekin, Ill., Oquawka, Ill., Waverly, Iowa, Cape Girardeau, Mo., Cora Island, Mo., Montezuma, Ill., Lacon, Ill., Keithsburg, Ill., Naples, Ill., Birds Point, Mo., Glasgow, Mo., Havana, Ill., Morris, III., Muscatine, Iowa, Grand Tower, Ill., and Osceola, Ark.

Information received from the Farm Credit Administration is to the effect that a considerable extension is contemplated in river-bank grain handling facilities, due to the successful results obtained during 1938. This is no doubt stimulated by the financial benefits received by the farmers, estimated by the comptroller at $517,900, only allowing an average saving of 1.43 cents per bushel.

What other river transportation line would have been able to so expand and adjust its operations as to care for this unusual public demand?

SHIPMENTS FROM POINTS WHERE NO TERMINALS ARE LOCATED

Now, in the city of Muscatine where we handled grain through privately owned river-bank equipment, there were over 3,000,000 bushels of grain shipped through there. The man who runs that elevator very recently told me that the farmers for 150 miles around had received 4 cents more per bushel for every bushel shipped through his elevator than they would have received if the grain had been shipped by rail. The president of the biggest national bank in Muscatine told me that most of the farmers in that section were now depositors in the bank when before they had been borrowers.

COOPERATION WITH THE RAILROADS

You would think to hear what has been said that we have never cooperated with the railroads. I would just like to point out a few facts about this, especially about Kansas.

Through the cooperation of the Union Pacific, of which Mr. Carl Gray was the chairman of the board, or president, and the Inland Waterways Corporation, and the officials of Kansas, they have built a grain elevator there which cost $4,500,000 and they have now just completed one of the biggest food markets in the whole United States right on the river bank secured because of the cooperation of the Union Pacific and the Inland Waterways Corporation.

I have on my desk down in my office a letter from the receiver of the Missouri-Pacific Railroad asking me to interfere and try to help save that railroad from rates which are being introduced by other waterway operators.

CLINTON, IOWA

Clinton, Iowa, was the only city where the Inland Waterways ever wanted a terminal that it did not get-it was fought by the Chicago & Northwestern Railroad; but in the last year the Chicago & Northwestern Railroad through intermediaries has come to the Inland Waterways Corporation and asked them to assist it in getting a terminal located at Clinton, Iowa, offering cooperation through joint routes and rates. The corporation did all in its power to have such a terminal located.

TOTAL AMOUNT OF MONEY RECEIVED FROM THE GOVERNMENT

Now, let us see what were and why, some of these charges that are put against the Inland Waterways Corporation, and how they should be credits instead of debits.

The total amount of money which this Corporation ever received from the Government has been $12,000,000. It is true we had turned over to us some facilities in 1924 which were appraised at $10,000,000. They were wartime facilities and all other wartime facilities were sold for about 5 cents on the dollar. This $10,000,000 which the Corporation took over could not have been disposed of for $1,500,000. Most of it has been displaced.

Through our operations, through the application of our funds derived from depreciation, and of our funds that we have made from operations, we could return to the United States today, for the $12,000,000 cash and that $10,000,000 appraised value facilities which were not worth over $1,500,000, almost $28,000,000. In other words, we stand ready to turn back to the Government over twice the amount of money in has given us.

Now, we are charged with having received this $28,000,000 from the Government. We have not received that from the Government. We have charged ourselves with such an indebtedness to the Government, and we have built it up from our own operations. Yet we are charged to have received this amount from the Government.

We have not built this value up from any appropriated money. All appropriated money amounted to $15,000,000; you have not appropriated anything additional, and of the appropriation of $15, 000,000 three million was never drawn from the Treasury and the appropriation canceled. We have had in cash twelve million only.

Now, we have built up these values and we have paid for them out of our own funds received from operations. It certainly did not come out of the Treasury.

Now, our opponents want to make a lot of other charges against the Inland Waterways Corporation, and they write to various people and ask them to make charges against the Corporation, that are based entirely upon ignorance or a misapprehension, or just a plain desire to get in the limelight.

I just want to give you a fair sample of how the people themselves feel. I have been traveling for the past 4 months, practically all over the territory covered by the operations of the Inland Waterways Corporation. I have not found anybody yet who wants the Inland Waterways Corporation dissolved, nor have I found anybody who thought that there was any danger of it being dissolved. It is too big a thing, they said, and "don't get excited." I am not excited. If you want to sell it, it is up to the Government, but it does seem to me that it is an awful waste of money to just break up something that you have been 15 years building and that is rehabilitating water transportation.

For example, here is a letter from the Memphis Harbor Com

mission:

MEMPHIS HARBOR COMMISSION, CITY OF MEMPHIS,

Maj. Gen. T. Q. ASHBURN,

Inland Waterways Corporation,

Memphis, Tenn., February 10, 1939.

1016 Munitions Building, Washington, D. C.

DEAR GENERAL: As a matter of information I am enclosing herewith a copy of a letter I am writing the Bureau of Valuation of the Interstate Commerce Commission.

It appears that under a hearing now going on-Docket No. 26712 relative to rail-barge joint rates-the railroads contend that various properties owned by cities and leased to Inland Waterways Corporation should be set up in the valuation of the property of the Inland Waterways Corporation under the title Property Used but Not Owned-Owned by Various Cities.

This contention seems very farfetched. Your Corporation is paying a fair rental for the Memphis municipal terminals and, of course, you are including this rental in your operating expenses. To set a valuation of the property up in your books would be a duplication. Frankly, I have no sympathy with the efforts of the railroads to "hamstring" the Federal Barge Line, and I do not propose to go to the expense of getting up the information requested. Hoping that our action in this matter meets with your approval, I am Very truly yours,

MEMPHIS HARBOR COMMISSION.

By J. B. EDGAR.

The CHAIRMAN. General, I wonder if without materially injuring your statement, you could conclude pretty soon. There are a number of members who would like to ask you some questions.

General ASHBURN. I am almost through. I just have one or two other little things.

WATER CARRIER EARNINGS

Now I just want to introduce in here in evidence, the earnings of our various competitors, to show why they are not particularly anxious to have us thrown out of business. This is a compilation of the Interstate Commerce Commission for the last 3 months which shows that the American Barge Line, which is one of our competitors, had $542,115 freight revenue in 1938, as compared with $388,474 in 1937, an increase of 39.5 percent; and carried 181,627 tons of revenue freight in 1938 as compared with 114,056 tons in 1937.

It shows that the Federal Barge Line had freight revenue of $1,917,410 in 1938 as compared with $1,701,710 in 1937, an increase of 12.14 percent; and carried 672,304 tons of revenue freight in 1938 as compared with 567,343 in 1937.

It also shows that the Mississippi Valley Barge Line Co. had freight revenue of $590,959 in 1938 as compared with $487,079 in 1937, an increase of 21.3 percent; and carried 106,587 tons of revenue freight in 1938 as compared with 101,852 tons in 1937.

Now, you will observe that both these competitors of the Federal Barge Line had a greater increase in tonnage revenue than the Federal Barge Line itself. That is the reason they are not wanting the Federal Barge Line put out of existence, because the Federal Barge Line is an agency of this Congress and especially this committee, to see that water transportation is rehabilitated.

LOCATION OF INDUSTRIES ON RIVERS

Now, I had occasion just day before yesterday to read a statement prepared by the president of the Mississippi Valley Barge Line who cited a few of the industries which have been located along the stream due to the Inland Waterways Corporation.

He cited the Ford assembly plant at St. Louis, which provides employment for 4,500; the steel plants, and other industries at St. Louis, and certainly makes the point as to the retention of the aluminum plant at East St. Louis, which is a $30,000,000 concern, which would have gone out of business entirely if it had not been for the cheap transportation afforded by the Inland Waterways Corporation. They would have removed their plant to the seacoast.

At Clinton, Iowa, the cellophane factory built by the Du Pont Co.; the Curtis Co., with an aggregate capital of $20,000,000, which employs

500 men.

Rock Island, Ill., the Farmall plant, the International Harvester Co. plant, with a pay roll for 1937 of $11,000,000; the J. I. Case Co. plant and the Deere & Co. plant.

Peoria, Ill., the Caterpillar Tractor Co., 12,500 employees; Hiram Walker Distillery, 800 employees; and the Le Truneau Co. roadmachinery plant, with 600 employees.

At LaCrosse, the Allis-Chalmers Co., with 500 employees; the plants of the National Piano Manufacturing Co., Heileman Brewing Co., LaCrosse Rubber Mills, Iron Products Co., and the Crane Co. (air-conditioning equipment).

Minneapolis and St. Paul, the Shell Petroleum Co., Socony Vacuum Oil Co., Pure Oil Co.; vast quantities of coal and coke; the Great Lakes Coal & Coke Co., and the Carbo Coke Co.

Dubuque, Iowa, 5 new industries employing 1,000 persons.

In Memphis, eight different manufacturing operations in 1937, with pay rolls aggregating a million dollars. The Firestone Tire & Rubber Co., Jones & Laughlin Steel Co., and Spang, Chalfont Steel Co.

At Kansas City, I have already told you about the grain terminal and the food market.