stream you can move your machinery from one project to another and in that way save a great deal of unnecessary expense that you would have to meet if the work were done piecemeal.

Mr. ANGELL. In the prosecution of the work to construct these projects and other river and harbor projects which have heretofore been authorized, to what extent does the construction interfere with the program of Federal housing?

General WHEELER. There was a committee that considered this subject very carefully, and it has been agreed by the Housing Expediter that the work involved in river and harbor and flood control projects would not affect the housing program adversely.

Mr. ANGELL. In other words, the work would be so prosecuted that that it would not interfere with veterans' housing?

General WHEELER. Yes. There is, of course, a certain amount of . housing provided in the construction itself by the contractors; so there is a tendency to assist in the housing program.

Mr. RANKIN. It would have a tremendous effect on the unemployment situation with reference to returning veterans?

General WHEELER. Yes; that is very true. We have always felt, with reference to unemployment, that our projects are based entirely upon an economic justification; they are justified regardless of that particular consideration, and I do not think that we, unless directed to do so in consideration of a large public-works program, would use that as one of our reasons for these projects, because basically the reason for these projects is their benefits and their economic justification. Mr. RANKIN. What I had reference to was that it would have a beneficial effect, in that it would furnish employment to many thousands of returning veterans.

General WHEELER. Yes; that is true.

The CHAIRMAN. General, a number of years ago General Markham, when he was Chief of Engineers, submitted a statement to this committee-I do not recall the figures-showing what proportion of the cost of river and harbor improvements could be allocated to employment of labor. Would that proportion be changed materially under present conditions, do you think?

General WHEELER. I do not remember General Markham's figure, but I feel pretty certain that it would be practically the same today. The CHAIRMAN. I am wondering if the Department can furnish us with figures showing those estimates?

General WHEELER. Yes; we can get it and we will insert it in the record. Colonel Feringa says he thinks it is about 80 percent. The CHAIRMAN. It was something like that; yes.

(The information requested is as follows:)

AMOUNT OF LABOR EMPLOYED ON RIVER AND HARBOR WORKS

1. The following analysis, showing proportion of money spent for direct and indirect labor on work done by the Corps of Engineers, United States Army, with Government plant and hired labor, has been compiled from the records and cost accounts of the Engineer Department.

2. The indirect labor charges are based on the proportionate labor costs of commodities delivered, from figures secured from a representative of the Tariff Commission.

NOTE.-When work is done by contract the contractor's profit, such as it may be, must also be met. Under the provisions of the law, a contract may not be awarded if the bid exceeds by 25 percent the estimated cost of doing the work by Government plant and hired labor. This provision serves to prevent the payment of excessive profits to the contractor. In point of fact, under present conditions, bids received are frequently less than the estimated cost of doing the work by Government plant and hired labor.

Mr. PITTENGER. General, you say there are about 50 or 60 projects here?

General WHEELER. Yes.

Mr. PITTENGER. Is the St. Lawrence seaway and power project one of those projects?

General WHEELER. No, sir.

Mr. PITTENGER. That was omitted from the program, was it?

General WHEELER. That is receiving special consideration by the Foreign Relations Committee of the Senate.

Mr. PITTENGER. I believe you testified before the Senate Foreign Relations Committee on the joint resolution of the House and Senate for the approval of that project?

General WHEELER. That is correct, sir. Colonel Feringa also testified.

Mr. PITTENGER. In that connection you are familiar with the type of opposition that the project encountered?

General WHEELER. I have been informed of it; yes, sir.

Mr. PITTENGER. You know that directly or indirectly the Association of American Railroads had a lot to do with that opposition over there?

General WHEELER. I have heard so, sir.

Mr. PITTENGER. Were you there when they put their witnesses on?
General WHEELER. No, sir; but I read the testimony.

Mr. PITTENGER. You have read all that testimony?
General WHEELER. Yes, sir.

86902-46- -2

Mr. PITTENGER. Of course there was some sectional opposition and some utilities, but the backbone of the opposition came, as I understand it, from the railroads, because they claim that the project would be harmful.

General WHEELER. The railroads opposed the project.

Mr. PITTENGER. That was in spite of the fact that the War Department engineers have held that the project would be beneficial to the American people?

General WHEELER. Yes, sir. Well, Congressman Pittenger, the way I feel about that opposition, or any other opposition, for that matter, is that it serves to bring out all the features of a project; and we welcome objections with a view to seeing whether we have considered every phase of a project.

Mr. PITTENGER. So do I. That has always been your policy?
General WHEELER. That is correct.

Mr. PITTENGER. I was not criticizing those folks. I think everybody has a right to be heard on all subjects, in the American Congress and before the departments.

It is the policy of the War Department engineers to give the railroads and other transportation people and other interests their day in court when you consider these projects in their initial stage, is it not? General WHEELER. Yes, sir; and I would like to inform you that one of the projects that is coming before your committee has some opposition that I was informed about, and we offered the services of our office to prepare the papers that they are going to present, with a view to seeing that your committee does have all the information with respect to the project in arriving at your decision.

Mr. PITTENGER. As I understood your statement, which was carefully worked out and presented here, a great deal of transportation on our rivers has to do with bulk commodities which, by reason of the freight costs by railroad, people would not be able to have hauled?

General WHEELER. Yes. And I believe, further, that our country would have had a very difficult time to conduct a two-ocean war if it had not been for our waterways, because they are capable of expansion; they have a tremendous reserve capacity that can meet the increased need as a result of war, and their actual performance in the curves shows that they were used.

Mr. PITTENGER. I do not want to prolong this discussion, but it has been my experience as a member of this committee that the Association of American Railroads has consistently opposed every river and harbor project that the War Department engineers have presented to this committee.

With that as a background I would like to ask you a question in two or three parts. The first part is, Do you know why that consistent opposition has been manifested? The second part of the question is, Do the War Department engineers report out projects that they figure are going to damage the American people or the railroads? Just tell us what your policy is about that.

General WHEELER. We believe that every form of transportation is economically justified in our country. We believe there is plenty of cargo for every form of transportation. This past war shows that we needed more than the railroads could carry or the waterways could carry, more than the airways could carry. Consequently we feel that there is plenty of cargo for every type of transportation.

The CHAIRMAN. We were even short of pipe-line transportation, and erected thousands of miles of large pipe lines.

General WHEELER. Yes, sir.

Mr. DONDERO. Has Congressman Pittenger removed any doubt that might be in your mind that he is for the St. Lawrence project? General WHEELER. Yes.

Mr. RANKIN. Let me call attention to one other thing, General Wheeler. If it had not been for the development of the Tennessee River, the Columbia River, and the Colorado River, America would have been greatly embarrassed, or greatly handicapped, in the production of the materials of war, because it would not have had the supply of electric power those projects furnished.

General WHEELER. That is correct, sir. Those were essential demands in our marshaling of all our resources to meet the two-ocean war. Mr. PITTENGER. I did not quite finish my question. I wanted to find out when we are going to have the St. Lawrence seaway and power project hearings before the committee, if you are able to answer that.

General WHEELER. I am sorry; I cannot answer that. We finished our testimony before the Senate Foreign Relations Committee.

Mr. PITTENGER. Your testimony would be the same testimony that you would give over here?

General WHEELER. Yes. We are in favor of it.

Mr. AUCHINCLOSS. You made the statement that the Association of American Railroads had consistently opposed every canal project. Maybe you are correct. But there is one project in New Jersey which the Pennsylvania Railroad has not opposed, and that is that monstrous proposition to build a ditch across the State of New Jersey. It has always been a matter of interest to me just why the Pennsylvania Railroad did not object to that.

Mr. PITTENGER. You know the answer.

Mr. AUCHINCLOSS. Could you enlighten me?

Mr. PITTENGER. No. I am taking in too much territory; but I know what I have been told.

Mr. DONDERO. I do not think it could be said that the railroads have opposed all rivers and harbors projects.

Mr. PITTENGER. It certainly can.

Mr. DONDERO. I have been on this committee for nearly 14 years and I am certain the gentleman is mistaken.

Mr. PITTENGER. Point out a few of them that have not been opposed by the railroads.

Mr. DONDERO. I think I can successfully resist that assertion. The gentleman is in error.

Mr. PITTENGER. No; I do not want that sort of a self-serving declaration in the record. The railroads have consistently opposed all of these worth-while projects. Perhaps I have covered too much territory, because last fall they did appear in connection with a big canal that my distinguished and affable colleague from New Jersey was interested in, and they said they would not oppose it, and it took me a month to get over the shock.

Mr. GEELAN. In the last river and harbor bill there were a number of projects being considered for further development. In connection with the statement by the gentleman from Mississippi (Mr. Rankin) as to the feasibility or lack of feasibility of moving equipment on a

projects which has been started on a previous authorization, would it not be better and would we not save money if we were able to combine two projects; and, if so, would you be willing to give us an estimate of the amount of money that would be saved by so doing, if it receives the approval of Congress?

General WHEELER. Yes, sir. In the listing of projects that was requested this morning we will indicate the resulting decrease in previous authorization. In general, I believe that the most economical prosecution of the construction would be to let as many contracts at the same time in the various localities that the funds would permit and the resources available would permit, because we would have the project getting under way, and benefits do not accrue until the project is completed, and that would serve to expedite construction. But the movement of the equipment is definitely an advantageous procedure. Mr. GEELAN. You have been requested to insert in the record the number of projects and the amount of estimated cost on each one. As a further break-down on that, if it is possible I think it would be extremely helpful to the committee if you could, in those instances where the entire project could not be completed within the fiscal year, give us information as to how much money you could advantageously spend on that program for that year.

General WHEELER. That is generally given in the project document and I would like to suggest that the appropriation part of it would be naturally handled by the Appropriations Committee when the time came; but before making an appropriation, I believe that the project, when considered by this committee, should be fully considered and determined as a comprehensive plan, and then if you wanted to limit the authorization that would be applied to that project for initiation or partial accomplishment of it, you could do that; but I do believe that the whole plan, the comprehensive plan, should be considered by the committee and either approved or disapproved, and then the actual authorization considered as a separate consideration.

Mr. GEELAN. I am in complete agreement with that. The only thing I ask is one further figure to show what part of the whole can be feasibly used in this particular year.

General WHEELER. Yes, sir; we can do that.

(The information requested is as follows:)

All the projects in the list previously furnished can be completed within about 1 year or slightly in excess thereof except the following projects which can be completed within the periods stated after each one, provided the necessary appropriations are allocated: