reduction in freight rates, which improved water facilities would bring? The CHAIRMAN, Yes. Mr. PEAVY. Well, we have not anything of that kind in Washburn. People living in my town can go and take coal off the ship and pay exactly the same price for that coal as you pay in Detroit or St. Paul. The CHAIRMAN. Is not the difficulty you have there that it does not make any difference whether you carry it a couple of hundred miles longer or farther, the rate is the same? Mr. PEAVY. We do not think that. We think people who regulate those things are in charge of the railroads. Mr. HULL. You think the railroads and boats are in cahoots? Mr. PEAVEY. We think the only boats there are are owned by the railroads or controlled by the railroads. Mr. McDUFFIE. If that is a fact, you ought to be able to show it. Mr. O'CONNOR. With the railroads apparently divorced from the boat systems, if new enterprises would put new boats on there the old boats would simply lower their rates and run this new crowd out. Mr. PEAVEY. I understand that some of the methods used to drive the water commerce we used to have off of the lakes was more particularly not only by competitive means and cheaper rates, etc., but by the force of the railroads at the two opposite points refusing to carry the independent carrier's businessthey refused to carry the business which the independent carrier whom they could not control, gave. In other words it left them to dealing in a haphazard way. Mr. NEWTON. The railroads would not connect with them, or make a joint terminal? Mr. PEAVEY. That is correct. The CHAIRMAN. During the war Mr. W. J. Connor came down here to see me. He said he is the largest boat owner in the world. I believe that is true. We had a tremendous pressure on for cars. I went with him to the car service division of the Railroad Administration. He wanted nearly 400 cars a day-400 freight cars—and I know we had to spend a good deal of time, but in the end he got his cars. I just give that as an illustration that here is an individual operating a great line of boats, large enough to supply about 400 freight cars a day. I think my figures are right, though it was some years ago. I do not believe that if railroads were in control of boats on the Great Lakes he would be able to compete with them. Mr. KINDRED. Did you not say that was during the war? Mr. KINDRED. Well, would not conditions be different? Were not the railroads operated by the Government? The CHAIRMAN. Yes; but I do not think that would make any difference. Mr. NEWTON. Suppose they refused to build their terminals down to the water's edge, and suppose a man has a boat line coming in there and when his freight lands, the railroad refuses to pick it up for days and days, and they do not get the freight down to the consignee in time for it to go out on the boats-through such methods they can destroy a boat line by refusing to cooperate. The CHAIRMAN. My understanding is that the Interstate Commerce Commission has a right to compel them to connect with the boat lines. (See also record of hearings on Frankfort Harbor in separate pamphlet). (Thereupon, at 5 o'clock p. m., the committee adjourned to meet again at 10 o'clock, Saturday, April 12, 1924, at 10.30 o'clock a. m.). COMMITTEE ON RIVERS AND HARBORS, HOUSE OF REPRESENTATIVES, Saturday, April 12, 1924. The committee this day met, Hon. S. Wallace Dempsey (chairman) presiding. FRANKFORT AND MUSKEGON HARBORS, MICH. The CHAIRMAN. Gentlemen, do you wish to hear anything more about the two harbors we have been talking about, Muskegon and Frankfort, the two harbors on the Great Lakes? General, have we any other harbors on the Great Lakes besides these two? STATEMENT OF MAJ. GEN. LANSING H. BEACH Continued General BEACH. There is one upon which a preliminary examination and survey has been submitted, Great Sodus Bay in New York. It is not yet printed. The total cost is $51,300. The CHAIRMAN. That is near Rochester? General BEACH. It is located on Lake Ontario. General BEACH. It is the only other harbor on the Great Lakes besides Muskegon and Frankfort. Doctor KINDRED. What is the improvement there? General BEACH. Very largely dredging. Mr. MANSFIELD. You made a favorable report? General BEACH. A favorable report; yes. Mr. PEAVEY. May I call to the attention of the committee what I referred to yesterday as the divorcement of rail and water transportation as it affects the commerce on the Great Lakes? I would like to say that the information I expected to have to present to the committee on this subject is not obtainable. Some years ago there was what might be called a national investigation in which all the boat owners and those interested, men connected with independent lines and others on the Great Lakes, presented complaints as evidenced before a commission that I believe was appointed under authority of Congress to take testimony on that very subject; but my information at this time is that there were only five copies made of the proceedings of those hearings and that they are not available. The CHAIRMAN. That is, they have not been printed? Mr. PEAVEY. They have not been printed or are not available to be used on occasions like this. The CHAIRMAN. I tell you how you can get all your information quicker and better than from that hearing. If you will call up the Willard Hotel, Main 4420, and tell them you want the room of Harvey He is Goulder, who is the attorney for the Great Lakes Carriers' Association, he will be able to give you the information you want. right down there and he telephoned me 10 minutes ago. He will tell you all you want to know in 10 minutes. Doctor KINDRED. How do you spell the name of that harbor on the Great Lakes that you have just referred to? General BEACH. Sodus, S-o-d-u-s. Doctor KINDRED. On Lake Ontario? General BEACH. Yes, sir. The CHAIRMAN. Are there any members of the committee who desire to discuss these two projects further-Muskegon or Frankfort, or both of them? Mr. SEGER. I think Mr. McLaughlin being here could straighten out that situation which arose yesterday as to why the people in Frankfort are not contributing. One objection was raised here I think. And he can also tell us what the railroad people in that terminal propose to do to other carriers that want to go in there and start a lake service. The CHAIRMAN. All right, Mr. McLaughlin. STATEMENT OF HON. JAMES C. MCLAUGHLIN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN Mr. MCLAUGHLIN. Mr. Chairman, Frankfort at the present time The CHAIRMAN (interposing). I will tell you just what the matter is before us at the present time. The testimony shows that those two harbors, one of them, Muskegon, has 1,382,000 tons of freight; the other has about 300,000 tons of freight. I am simply quoting from memory. There has been a very large increase at Muskegon in the past year; an increase of 20 per cent over the preceding year at Frankfort. The increase in value at Muskegon was 250 per cent in 1922 over what it was in 1921. Now, the freight I am talking about is aside from car ferrying freight, it is the general freight. I am just talking without referring to the record. Perhaps I had better refer to the record. Mr. MCLAUGHLIN. You have those figures reversed. The larger tonnage was at Frankfort, larger than at Muskegon. The tonnage at Frankfort was almost exclusively car ferrying tonnage. The boats plying to and from Frankfort are largely the car ferry boats of the Ann Arbor Railroad Co. The business at Muskegon is diversified. There are a number of lines of boats plying there, some of them all the year round. There is one line connecting Chicago and Muskegon, stopping by the way, 12 or 14 miles south, at Grand Haven in making their trip. The CHAIRMAN. Frankfort has the greater tonnage, car. It has 1,361,726 tons car-ferry tonnage, in addition to 1,988 tons of other freight, with a value of $79,000,000. At Muskegon there has been an increase of 20 per cent, and a large increase in value also. Now, at Muskegon you have 382,000 tons, and apparently none of that is car ferrying. Mr. MCLAUGHLIN. No. The CHAIRMAN. And that grew from $18,000,000 in value in 1921 to practically $42,000,000 in 1922. So there has been a very large increase at both places, but the increase in value at Muskegon has been quite remarkable. Mr. MCLAUGHLIN. When I speak of car ferry business I have in mind not only the carrying of freight cars intact, but tonnage carried by the Ann Arbor boats. I think I am entirely right about that. There has been a large increase in the value of the tonnage at Muskegon. That place has had an interesting experience in history. Years ago it was the greatest lumber manufacturing port in the world; but the timber tributary to it was exhausted some years ago. I can speak advisedly about Muskegon because it has been my home for more than 50 years. After some years of, well, little if any growth, growth began again, some 12 or 15 years ago, and has been. very, very rapid, the population increasing from 24,000 to 37,000; and, besides just across the street, you might say, you can not tell when you pass from one city to another, there is a city that now has about 15,000 population. And then there are a lot of people around the two cities, out in the townships, adding to the population, so that there are at least 55,000 people in that community. The town is growing very rapidly and, as the corps of engineers say in their report, it is the only harbor that is not suitably protected by breakwater or otherwise. Now, you gentlemen are familiar with the course of proceedings of this kind. The Frankfort matter has been under consideration by the corps of engineers since 1916, and is now making a report that is entirely favorable. The business there is increasing, the harbor is grossly inadequate. Last winter one of the great boats was destroyed in a storm at the entrance of the harbor, and something must be done. Mr. MANSFIELD. Was that one of the ferryboats? Mr. MCLAUGHLIN. Yes; one of the large boats. A day or two ago I gave the clerk of the committee some photographs, and I see them lying on the table now. And by those photographs you will be able to see the character of the boats. Those who have not seen those boats and know nothing of their operation can not appreciate the amount of business that they do, the character of their business, and the absolute necessity of adequate harbor facilities. It is a character of business in which the entire country is interested. It is not a local proposition; it is largely through business. The Ann Arbor Railroad runs from Toledo in a northwesterly direction to the port of Frankfort. The CHAIRMAN. The railroad that Ford owns? Mr. MCLAUGHLIN. No; that runs south from Detroit. That is the Toledo & Ironton Road. The Ann Arbor Railroad Co. collects freight cars coming from the East and South, coming from all over those sections of the country, collects them into trains and takes them into Frankfort, and puts them intact into these great boats that carry them to three different points in Wisconsin and in the Upper Peninsula, there connecting with railroads that take those cars all over the West and Northwest, clear to the Pacific Ocean. matter, I say, in which the entire country is interested. Mr. PEAVEY. May I interrupt you with a question? Mr. MCLAUGHLIN. Certainly. It is a Mr. PEAVEY. Do I correctly understand that it is your idea and your position that this traffic, which you frankly state is largely through traffic for the benefit of these railroads, should be supported by Government policy and a Government expenditure of money? If so, why should that be done, in the building of harbor protections or harbor betterments, any more than any part of the railroad by which the haul is made? Mr. MCLAUGHLIN. It is interstate commerce, all of it. The CHAIRMAN. Mr. McLaughlin, are not our harbors, when we improve them, used by everybody, whether it be a common carrier or the public, private vessels, even the smallest fishing smacks? Mr. MCLAUGHLIN. Yes. I don't know of a harbor on the Great Lakes The CHAIRMAN. You can not pass any legislation, as I understand it, excluding any particular class of people. Take these harbors in there, aside from the car service-take Muskegon alone-here you have practically a half million tons of traffic. Take your waterways of the United States as a whole, and that is a very large traffic. The value of it is $41,000,000. I am not talking about car ferrying, but about general traffic. That is an enormous traffic. Sodus Bay is a small harbor. That is practically a harbor of refuge. I am sorry to say we do not have the traffic on Lake Ontario that you have on the upper lakes. We do not have the ports, but up there you have an important situation, and here are the whole Great Lakes with the biggest commerce in the United States. Mr. MANSFIELD. And the cheapest. The CHAIRMAN. Yes; and the cheapest. This is all that there is in this bill that goes for the Great Lakes, and I do not see any way we can shut these railroads out from using these two harbors. Mr. MANSFIELD. Go a little further. Take New York or San Francisco or Galveston or any other harbor. They are for other traffic, through as well as local. The CHAIRMAN. You take it for New York City and your illustration is all right. One of the things we did two years ago was this: Over in New York, they are spending about $500,000,000, Mr. Mansfield, locally, two and a half times as much as we are going to spend on all our projects. They are spending that locally to do away with the congestion and high charges in that point. Well, now, as a matter of fact, what they are doing is this, what we did in our last bill: We went over to your State of New Jersey, which is a part of the great port. First we gave you deep water between Staten Island and the mainland, next we gave you deep water in New York Bay. What does that mean? It means this: Heretofore, you had all of the transcontinental railroads, except the New York Central, every one of them coming into New Jersey. Heretofore, you had to lighter everything from abroad to New Jersey and from the inland over to the ocean. Now, we have avoided all that; we have given them deep water. What does it mean? We have given that deep water to the transcontinental railroad. But that is the business of the United States. It is all carried by these transcontinental lines. I have not added up the figures, but on the whole we are spending $50,000,000, and these people are spending five hundred or six hundred million dollars locally, and all we do is to bring their deep water to them. They dig channels and make |