existing Federal Barge Lines with the improvement which would be made under this bill would actually accelerate land transportation rather than be harmful. It is not the intention of the Federal Government to continue in this field. Within a 5-year period the Federal Barge Lines will be stabilized and they will then be turned over to private enterprise. Under S. 211, future activities of the Federal Barge Lines would be limited primarily to the fields of pioneering and research in the development of its bargeload, and especially its less-than-bargeload traffic. If my amendment is included in the measure finally considered the Tennessee and Cumberland Rivers will become a part of the system and will further increase the inestimable potential of this worthy project. The Federal Government has invested about $150,000,000 in navigation improvement on the Tennessee River, with an additional $50,000,000 estimated as necessary to complete existing projects. On similar improvement work on the Cumberland River, the Government has already spent nearly $10,000,000, and it is estimated that an additional $30,000,000 will be needed for completion of projects which have been proposed.

Public benefits from these investments will develop only as shippers make full use of the channels. The lower-cost transportation available will substantially benefit our whole economy as it is used in accommodating the flow of commerce for industry and agriculture.

Prior to 1933, under the Federal navigation project, the Tennessee River was improved to a navigable depth of 9 feet at low water from the mouth to Knoxville, Tenn., a distance of about 650 miles, obtained by the construction of low dams. Similarly, the Cumberland River below Nashville was improved by the construction of locks and dams for about 44 miles to secure a 6-foot navigation at extremely low water from the mouth to Nashville. Later, further improvement of the Cumberland River was authorized to provide for a 9-foot channel.

These newly created channels are now an integral part of our whole inland waterways system. They are available for the interchange of traffic between the Tennessee Valley and the Ohio, Illinois, Mississippi, and Missouri River Valleys and points along the Gulf coast.

The inclusion of the Tennessee and Cumberland Rivers in the inland waterways system, rather than being detrimental to land transportation in that area, would do much to accelerate the business of both railroads and trucking companies. Take, for example, a large industry that is built on a waterway. It is dependent upon low-cost water transportation for raw materials and to ship a part of its finished products. At the same time, the railroads and trucking concerns do a lot of business in the form of handling finished products which that industry is shipping to off-waterway cities. A joint rail-water rate might very well also aid the railroads by permitting a commodity to move that would have proved prohibitive for the entire haul by rail.

It is shown by TVA studies that hundreds of shippers could use this new transportation medium at substantial savings in their transportation costs. This is particularly true of farmers and small-business men if less-than-bargeload shipments are made available to them. Shippers of the Tennessee Valley and other regions are showing increased interest in barge transportation as they study means of reducing costs in an era of growing competition. The manufacturers and shippers, who directly pay transportation charges, are necessarily concerned about increasing rates.

However, the consuming public also has a substantial stake in transportation costs. On the average, about 8 percent of our national income is spent for transportation of freight, and transportation costs average nearly 10 percent of the wholesale price of commodities. Actually, out of every $100 spent by the consumer, $8 goes to pay the transportation of the things he buys.

Development of river traffic is also certain to mean increased business for truck lines. Some of the products unloaded from a barge at a river terminal are apt to be shipped by truck or rail to some other point in the region that is not reached directly by water. It is clear, therefore, that the one service supplements the other.

Almost all of the developed traffic along our existing waterways is in bargeload quantities of bulk commodities like grain, coal, and gasoline; but 90 percent of the shippers who could profitably use the Tennessee and Cumberland Rivers and less-than-bargeload service. Unfortunately, this kind of service is not now being provided. It is also indicated that about 80 percent of these small shipments would move in joint hauls, partly by water and partly by rail or truck.

The attached table shows a break-down by size of the shipments for the body of traffic which TVA studies have indicated as available for shipment through

public terminals. It is clearly shown that traffic could move by water at a substantial saving in transportation costs.

The prime purpose in creating the Inland Waterways Corporation was to establish a barge service which could develop the small shipments on newly improved rivers. A further purpose was to assist in securing the publication of joint rates. Such services and rates are now being provided through the Inland Waterways Corporation on most of our newly improved rivers. They are sorely needed on the Tennessee and Cumberland Rivers; and Inland Waterways Corportation's operating authority should be extended to provide them there.

In order to make it possible for large numbers of small shippers to make adequate use of the channels of the Tennessee and Cumberland Rivers, it will be necessary for regular service to be established by a common-carrier barge line, scheduled to call at each major port every week, or an absolute minimum of every 2 weeks. Once this service has been put into operation, shippers can be expected to take advantage of it, and to continue to use it regularly when they experience its economical benefits. Eventually the total volume of these small shipments can be expected to build up to a high point which will insure that the barge line can operate profitably. According to recent surveys, there is a potential of hundreds of thousands of tons of traffic that could be moved annually in this way, with a resultant benefit to the people of the Tennessee and of the entire Nation.

At the time the Inland Waterways Corporation was created, the inadequate channel of the Tennessee and Cumberland Rivers rendered impracticable any large-scale freight operation thereon. Certainly at that time no positive plans for a comprehensive improvement of the Tennessee had been made. The reason for the exclusion of the Corporation from operation on the Ohio River and its tributaries in its original authorization was apparently that at that time barge services on those rivers in the Ohio Valley having satisfactory channel depths were already very well developed and adequate for the needs of the existing traffic in that area. It would be indeed illogical to assume that there was any specific intention of excluding the Corporation from the Tennessee River. There was no way of foreseeing that the Tennessee River channel would be completely developed so soon.

As it is, the Tennessee River is exactly the kind of newly improved river to which it was intended that the developmental efforts of the Inland Waterways Corporation be applied. Within the space of a very few years, this river has been converted from an erratic stream, which would not support regular and continuous modern navigation, to a first-class, 9-foot waterway with great potentialities. The same logic can be applied to the Cumberland River project.

The Federal Barge Lines' service is needed just as badly on the Tennessee and Cumberland Rivers as it is on the other rivers which Federal can serve or serves already-for example, the Illinois, the partly improved Missouri, the lower Mississippi, and the newly improved upper Mississippi. There is no justifiable basis for excluding the Tennessee Valley from the advantages of this service. The present law is grossly unfair and extremely discriminatory; the amendment I have offered would certainly lend equity to our Federal Barge Lines system.

Mr. Fred Schneider, a member of the staff of the Chattanooga Times, who has written a series of four articles dealing with present and prospective commerce on the TVA-improved Tennessee River, has given close and careful study to the subject of inland waterways, particularly with reference to the development of the Tennessee River as an inland waterway and the manner in which such development would affect Chattanooga. Since Chattanooga is a city which could be considered as an example of the cities to be affected by the proposed new inland waterways service, I consider it highly appropriate that I should include in my statement these four informative articles by Mr. Schneider.

BARGE TRAFFIC OF GOODS CUTS COST ONE-HALF-2,000 TONS OF STEEL MOVES BY RIVER FROM PITTSBURGH AREA THIS SUMMER-SEE CITY GREAT CENTERCHAMBER OF COMMERCE'S BROWN SAYS GROUP TO TAKE FURTHER STEPS IN DEVELOPING PLAN

(By Fred Schneider)

An important chapter in the development of transportation over the improved Tennessee River is about to be written. Tom W. Brown, chairman of the Chattanooga Chamber of Commerce water transportation committee, announced yesterday four Chattanooga industries have placed orders for about 2,000 tons of steel, which will move to this city by barge from the Pittsburgh area this summer.

The first of the shipments, 500 tons on a barge, is scheduled to be received at the Tennessee Valley Authority's public-use terminal here later this month. Others will follow.

The receivers of this freight will affect a saving of about $8.50 to $8.60 a ton, compared to present rail rates, or about one-half the cost of shipment by rail, Brown estimated. This will amount to around $17,200, figuring conservatively, he stated.

OTHER LINES CONSIDER

Plants in other lines also now are giving serious consideration to the possibility of effecting savings in the receipt of heavy raw materials by making bargeload shipments over the waterway, he stated.

Brown revealed plans he will present to his committee at a meeting to be called soon. A large dinner meeting will be arranged sponsored by the chamber, when officials of leading barge lines will be present to discuss the whole matter of utilizing barge transportation, the steps that should be taken and the savings that might be realized.

"Chattanooga is ideally located for river transportation, and since steel and other heavy bulk commodities can be moved here at great savings, it looks as though Chattanooga in the very near future might become one of the great distributing points for the entire South," Brown stated.

"For a number of years the Tennessee Valley Authority has been sponsoring and encouraging water transportation on the Tennessee River and Cumberland, and so far the major things that they have moved by water in and out of these areas have been grain, lumber, oil, coal, and automobiles.

"However, with the increase in railroad freight rates it now has become necessary for the manufacturers in these areas to seek out cheaper means of transportation.

SEEK CHEAPEST MEANS

"From all figures available, the cost of water transportation into Chattanooga on bulk commodities shipped from other connecting waterway points in full barge lots on an average is 50 percent under the cost of any other form of transportation and of course with the vigorous competition that is already a fact, manufacturers in this area must seek the cheapest means of transporting materials into this section.

"The shipments of steel already scheduled for Chattanooga consist principally of sizes and types not now being made in the Birmingham area. Actually they are moving from the Pittsburgh vicinity by barge on a rate that is slightly less than is the railway freight rate from nearby Birmingham.

"Two of the major steel producers in this country have sold this large quantity of steel to be moved into the port of Chattanooga and it is expected that some other large steel producers will undertake shipping steel by barge to Chattanooga. "American Barge Line Co. of Pittsburgh, Mississippi Valley Barge Line, and Commercial Barge Line have been reached and agreed to send top executives to Chattanooga for a conference. Chester C. Thompson, president of the American Waterways Operators of Washington, D. C., also has accepted an invitation to come here for the occasion.

"These top executives have offered to come to Chattanooga to meet with manufacturers and explain the ways and means by which materials can be barged in and out of this area, and also give us the exact freight rates and time required to transport. My committee will meet shortly to make plans.

"A. J. Wagner, chief of TVA's Navigation and Transportation Branch, and W. J. Sheehan of the branch's Division of Regional Studies have agreed to advise with us in connection with the whole program of gathering information and promoting the use of the waterway which will benefit the entire economic life of the community.

PLANS INCOMPLETE

"While definite plans for the visit of the waterway executives are incomplete, it is possible that the meeting will be held in the form of a dinner timed to fit in with the arrival of the first bargeload of steel ever consigned to a Chattanooga manufacturer."

Brown, who is purchasing agent for the Converse Bridge & Steel Co., said that his company is one of the large steel-fabricating industries that is planning to make extensive use of the waterway.

RIVER FREIGHT BEST FOR MANY HAULS; ACTUALLY BENEFITS RAILS, TRUCK LINES (By Fred Schneider)

Shippers of the Tennessee Valley and of other regions are showing increasing interest in barge transportation as they study means of reducing costs in an era of growing competition, A. J. Wagner of Knoxville, Chief of TVA's Navigation and Transportation Branch, reported yesterday.

This new addition to the waterway is only natural, for substantial savings are possible through the use of water transportation in the movement of many commodities, particularly those that are bulky and heavy, said Wagner. He cited the following as examples of the savings local shippers could realize by barge compared to rail movement.

Scrap iron from Chattanooga to an Ohio River port, $4.20 a ton.

Cast iron pipe from this city to the upper Mississippi River, $7.75 per ton. Iron and steel from a Midwest producing point to Chattanooga, $8.55 a ton. Pig iron from a midwestern port to Chattanooga, $3.70 a ton.

Petroleum products from a Mississippi River refinery to Chattanooga, $10.70

per ton.

Steel pipe and fittings from an Ohio River port to this city, $7.35 per ton. Wagner pointed out that the savings quoted compared to present railway freight rates are based on port-to-port movements, that is from one point on a waterway to another on a waterway. If either origin or destination point should be located so as to require a rail or truck haul, the savings would be substantially reduced.

"It is natural that manufacturers and shippers who directly pay transportation charges should be concerned about them," Wagner said. "However, the consuming public also has a substantial stake in transportation costs. On the average, about 8 percent of our national income is spent for transportation of freight and transportation costs average nearly 10 percent of the wholesale price of commodities.

More specifically this means that for every $100 you spend, $8 of it goes to pay for the cost of transportation of the things that you buy. Studies by the Department of Agriculture indicate that transportation costs account for about one-seventh of the ultimate price of foodstuffs.

"If bread is a typical food, the Department's analysis would indicate that about 2 cents out of the price of each loaf goes to pay for transportation of the wheat, the flour, and of the loaf itself."

The TVA official said that there appear to be at least three major factors contributing to the current increased shipper interest in river transportation. He listed them as:

1. As goods become more available and competition for markets increases, Transportation economies become more important to businessmen; speed in transport becomes less important.

2. The rising level of rail freight charges prompts shippers to look for cheaper methods of transportation. Rail rates on the average have increased approximately 50 percent since January 1947.

3. The Supreme Court decision of April 16, 1948, in the Cement Institute case required the cement industry to discontinue use of the multiple-basing-point pricing system. Some other industries followed suit. As a result, purchasers of steel, for example, now find that they must buy steel f. o. b. the producing mill and pay the freight themselves to their own plants. The natural result is they are interested in keeping transportation costs to a minimum. Many of them are turning to water transportation.

Figures on traffic volumes in recent years also reflect increased shipper interest in barge transport. Barge traffic on the Mississippi River system has increased, statistics show, from 25,000,000 tons in 1929 to 63,000,000 tons in 1935 and to 143,000,000 tons in 1948.

Wagner quoted figures showing that the rate of traffic growth on inland waterways recently has been substantially greater than traffic growth on the railroads. Since 1945, traffic of major barge lines serving the public on the Mississippi system has steadily increased, more than 30 percent, while railroad car loadings in the same period have increased less than 5 percent and actually were lower in 1948 than in 1947, he said.

"There is little question that the railroads will and always should handle the great majority of the Nation's traffic," he continued. "However, there are some particular hauling jobs for which the waterways are best fitted, others for which trucks are best fitted, and still others for which the railroads are best fitted.

NEED COORDINATION

"What we really need is an adequately coordinated and integrated transportation service which somehow fits each form of transportation into the job that it can do best and cheapest. Actually, many cases could be cited where railroads benefit from barge transportation.

"Take for example the large industry that is built on a waterway. Perhaps it would never have been built at all if it were not possible to obtain low water transportation costs on raw materials moved in and a part of the product shipped

out.

"But remember this point. The chances are that the railroad or railroads are getting a lot of business in the form of finished products which that industry is shipping to off-waterway cities.

"A joint rail-water rate might very well also aid the railroads by permitting commodities to move that would have been too costly for the entire haul by rail. Development of river traffic is certain to mean business for truck lines, too. Some of the products unloaded from a barge at a river terminal are pretty apt to be shipped by truck or rail to some other point in the region that is not reached directly by water. The one service supplements the other."

MOST RIVER FREIGHT IN BARGELOADS; SMALL SHIPPERS NEED ARRANGEMENT

(By Fred Schneider)

Most of the traffic which has moved on the Tennessee River to date has been in bargeload or even towload quantities amounting to 1,000 tons or more in each shipment, TVA studies reveal.

Small shippers, the average businessmen in the valley, have not yet used barge transportation. In fact they have been unable to use it because no barge line is yet offering service for less-than-bargeload quantities.

"The average shipper who has only a few tons of goods to ship at any one time needs barge service which will accommodate those small shipments and which will call at the major ports, on regular schedule, and pick up or deliver any traffic," said A. J. Wagner, chief of TVA's navigation and transportation branch. "In other words, barge service has to be made about as convenient and usable as the service offered by other kinds of transportation.

"Surveys of prospective Tennessee River traffic made seevral years ago indicate that about 9ercent of the tonnage expected to develop would consist of bulk commodities and could move in bargeload lots. Development of this kind of traffic is proceeding about as expected. The same suvey, however, showed that about 91 percent of the potential river shippers would need less-than-bargeload service.

"Stated another way, 5 percent of the traffic would be moved by 91 percent of the shippers. At Chattanooga, for example, out of 175 prospective shippers, 145 had shipments of less than 300 tons and 169 had shipments of less than 1,000 tons.

"The obvious conclusion is that a majority of the prospective barge shippers are small shippers and they need regularly scheduled barge service for less-thanbargeload quantities before the ycan use the river.

"This kind of service is not yet provided on the Tennessee and its lack constitutes one of the major obstacles to the average shippers getting in on river transportation benefits. If barge lines can be convinced that there are enough interested shippers to make inauguration of less-than-bargeload service profitable to them, it should ultimately be made available. Usually the shippers have to take the initiative."

Wagner said that transportation agencies and shippers need a better understanding of the potentialities and problems of inland waterway transportation. "Shippers, carriers, and the public geenrally have become so accustomed to existing transportation practices and are so impressed with the ponderous procedures necessary to obtain even minor changes that they are inclined to accept the existing situation without protest," he pointed out.

"Assembling freight in sufficient quantity requires careful advance planning of purchases, sales, or plant operations; it normally introduces new problems in warehousing; it may require special financing for large inventories, and in many cases the full benefits of water transportation cannot be obtained without first