farmer and stock raiser, La Salle; S. A. Kidd, La Salle Portland Cement Co., La Salle; J. B. McCafferty, manager La Salle & Bureau County Railroad; A. F. Schoch, banker and representative of shippers, Ottawa; J. C. Aydelotte, grain dealer, Pekin; R. H. Garm, banker, landowner, and shipper, Beardstown; Louis Lowenstein, land owner and shipper, White Hall; Henry T. Rainey, Congressman, landowner and shipper, Carrollton; Joseph' Leiter, president Ziegler Coal Co., Chicago; W. K. Kavanaugh, president Southern Coal, Coke, & Mining Co., St. Louis; C. B. Fox, president Aluminum Ore Co., East St. Louis; S. W. Allender, traffic manager Monsanto Chemical Works, East St. Louis; E. A. Smith, president Cairo Association of Commerce, banker and shipper.

The CHAIRMAN. In that connection, Chicago has grown very rapidly from 1890 to 1922?

Mr. HAYNES. Yes, sir.

The CHAIRMAN. What was the population in 1890, approximately? Mr. HAYNES. I do not recall, but I think I put it in the McCormick hearing.

The CHAIRMAN. Do you realize that Chicago had in 1890 7,000,000 tons of freight, and that with all its growth from 1890 to 1922 it had less than 3,000,000 tons of freight by water in 1922? Do you know that to be the fact?

Mr. HAYNES. I know that we are landlocked, if that is what you

mean.

The CHAIRMAN. You are on Lake Michigan?

Mr. HAYNES. Yes.

The CHAIRMAN. I am talking about your transportation by the Great Lakes. You had 7,000,000 tons in 1890 and you had less

than 3.000.000 tons in 1922?

Mr. HAYNES. Yes.

The CHAIRMAN. Is it not a fact that every other port on the Great Lakes of any considerable size has steadily and rapidly increased in water transportation on the Great Lakes?

Mr. HAYNES. There is quite a history back of that.

The CHAIRMAN. Is not that the fact?

Mr. HAYNES. I accept your statement of that.

The CHAIRMAN. Let me finish my line of inquiry. Is it not conceded that transportation by the Great Lakes is the cheapest transportation of any kind in the whole history of the world?

Mr. HAYNES. Yes, sir; very cheap.

The CHAIRMAN. And Chicago, so far as I can find, is the only port on the Great Lakes which has not steadily, continuously, and rapidly increased its traffic. Now, why, if you have gone down from over 7,000,000 tons on this cheapest of all waterways, how can you assume, with less than 3,000,000 tons in 1922, that you are likely to use a new waterway to any considerable extent?

Mr. HAYNES. In the first place, you must remember that the committee must consider this, that prior to Congress declaring a policy in section 500 of the transportation act of 1923 of the coordination of rail and water transportation at Chicago the Lake lines operating out of Chicago were practically dominated and controlled in the main by rail transportation agencies.

The CHAIRMAN. But in spite of that you had three times as much water transportation as you have to-day, and your total transportation in Chicago to-day must be between ten and twenty times what it was in 1890.

Mr. HAYNES. But do not lose sight of this, Mr. Chairman, that since the Esch-Cummins Act, whereas all the rail eastern trunk lines used to control in a large measure what the service would be on the Great Lakes, that is not a factor to-day as it was prior to that act. The CHAIRMAN. What year was the Esch-Cummins Act passed? Mr. HAYNES. 1920.

The CHAIRMAN. What time did it take effect in 1920?

Mr. HAYNES. The 1st of March.

The CHAIRMAN. You had practically all of 1920?
Mr. HAYNES. Yes.

The CHAIRMAN. For that year your transportation was a little less than the preceding year. In 1921 it grew from one and a half million to two and a half million, approximately, and in 1922 was nearly 3,000,000?

Mr. HAYNES. That is all very true, Mr. Chairman, but please do not forget this, that the amount of transportation in and out of Chicago by the Great Lakes is a very, very small per cent of the territory that can be served by that center for the reason that the tendency of development is westward, and 75 per cent of the manufactured products to-day out of Illinois, is in a westward direction and not back into the East, so as the population goes westward the consumption naturally goes that way, and in that respect we are land controlled exclusively.

The CHAIRMAN. In that connection I would call your attention to a comparison with Milwaukee, which has over five and a half million tons in 1922, on the Great Lakes. Now, let us take Cleveland. Mr. RANDOLPH. Are you referring to the Chicago River harbor or Chicago and Calumet harbor?

The CHAIRMAN. I will give you Calumet separately. I am referring to Chicago.

Mr. SWEET. What is the tonnage for the same period that you state as to Chicago, in Milwaukee? Has it decreased or increased? The CHAIRMAN. It has decreased, a very small decrease, from 7,000,000 to 5,600,000 tons, in Milwaukee.

Mr. SWEET. As compared with 7,000,000 to 3,000,000 tons.
The CHAIRMAN. Yes.

Mr. SWEET. How do you answer that, the movement of freight westward with the growth of population?

Mr. HAYNES. You must bear in mind when you are referring to Chicago and Milwaukee, the tonnage that is referred to here, a very small per cent of it is from Milwaukee or Chicago properly, and I think you will find that a great percentage of the tonnage through Milwaukee does not have its origin there. It has grain products of southern Minnesota mills eastward.

Mr. SWEET. With regard to your statement of the growing population affecting the tonnage, why would not that be as true of Chicago as of Milwaukee?

Mr. HAYNES. It is, and the flow of traffic from Milwaukee westward bound is very small.

The CHAIRMAN. Answering the question about Calumet harbor and river in Chicago, Indiana, and Illinois, in 1907 it had nearly 6,500,000 tons of traffic, and in 1922 it had over 9,500,000 tons. There was an increase there. Of course, the suggestion that the

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trend for manufactured products from Chicago is westward and not eastward would have only a very indirect bearing on our question here, because this is southward not westward.

Mr. HAYNES. That does affect the Southwest and Oklahoma. This rate applies to St. Louis and Memphis water and rail.

The CHAIRMAN. That is true.

Mr. SWEET. By the route down you would eventually get to Panama and the West.

STATEMENT OF MR. H. D. PIXLEY, REPRESENTING CARSONPIRIE-SCOTT & CO., OF CHICAGO.

Mr. PIXLEY. We are large shippers of Chicago, and I want to state right here in connection with what you are discussing that one of the contributing factors in decrease of tonnage may result from this very thing which has happened with us. We are serving Pacific coast territory to-day, and have been for some years back, from the eastern seaboard, freight that formerly moved to Chicago by water and was distributed from Chicago to the Pacific coast, and this freight is now moving by water directly from the Atlantic seaboard. That would have a very direct influence in reducing your tonnage by water into Chicago, because we are only one of many. But our diversion from New York has been very large.

The CHAIRMAN. But do you not think you will find, just as Mr. Haynes has agreed with me is probably the fact, that your total tonnage is from ten to twenty times what it was in 1890? There is your own tonnage. It is distributed somehow over rail and water and at one harbor you have lost three-fourths of it, and at the other harbor you made a very slight increase, and the rest of it must go by rail. There is not any other solution.

Mr. PIXLEY. Just what the percentage would be, I do not know, but I do know as far as our own industry is concerned there has been a very large diversion taken place from the Atlantic seaboard by water to the Pacific coast territory.

Mr. MANSFIELD. Is that on account of the Panama Canal?

Mr. PIXLEY. That is because it is uneconomical for us to distribute to the territory from Chicago. We have got to use a cheaper transportation from New York and distribute directly from the Atlantic seaboard.

The CHAIRMAN. Via the Panama Canal?
Mr. PIXLEY. Yes.

STATEMENT OF MR. R. M. FIELD, PEORIA, ILL.

Mr. FIELD. With reference to this Chicago situation that prior to 1919 and 1920 practically all the lake boats running into Chicago outside of cargo carriers were controlled by eastern railroads, as Mr. Haynes told you, the eastern railroads did not allow any other competition on that lake business. They only carried such freight by lake as they wanted to carry, enough to keep out other competition, and that was the situation for years. Business dwindled and dwindled because the railroads had it right in their group. About 1919 and 1920 the Interstate Commerce Commission decided that it was no longer proper for eastern railroads to continue operating lake lines and ordered them to divorce the lake lines. They sold their

boats and cleaned out the business, but in the meantime it called off the other competition so there was no business. Then the Great Lakes Transit Co. and one or two others came in and had to build lake tonnage in Chicago from the bottom up, so that accounts for the situation that you are describing.

The CHAIRMAN. Let us see if it does.

Mr. FIELD. And under the transportation act that same thing could not occur again.

The CHAIRMAN. Let us see if it explains it. Chicago operated under it the same as the cities of Milwaukee, Cleveland, Buffalo, and all the other great ports operated. Now, there was not the decrease in tonnage at any of those other ports at all. You will find on examing every one of them that that was not true except with Chicago. If it was the fact that the boats were railroad controlled, if it was the secret of the decrease, that would operate equally at Buffalo, Cleveland, Milwaukee, and Duluth. It would not operate at Chicago alone because it was a law which was in force at all ports, or it was a condition in force at all ports. So I can not see how that is an explanation. Take Cleveland here. In 1907 it had 12,872,448 tons and 10.925.692 tons in 1922. There was practically no deterioration, practically the same tonnage, and you take the figures between those two dates and you will see the figures continued practically the same, and how can you say that the condition which prevailed at all ports operated to the disadvantage of commerce at one port and not elsewhere? That is not possible.

Mr. HAYNES. I do not see the practical illustration of it at all, Mr. Chairman, from your illustration. In the first place, Chicago and Milwaukee made a desperate effort to get lake service at a time when it was in Lake Erie and Lake Superior plying from Duluth to Buffalo, when there was a clearing out of the Lake Michigan service because those boats claimed they made more money at Duluth than Lake Michigan.

The CHAIRMAN. That would relate simply to economic returns and not to ownership.

Mr. HAYNES. To the boat lines.

The CHAIRMAN. Yes.

Mr. HAYNES. Another reason is that you must bear in mind that all this lake traffic reaches its saturation point sooner or later. When you referred to Chicago

The CHAIRMAN (interposing). It has been steadily increasing. Last year there was the largest traffic in the history of the Great Lakes, 120,000,000 tons.

Mr. HAYNES. Taking the lakes as a whole.

The CHAIRMAN. Yes; I have a telegram here from Mr. Livingston this morning and he told me personally that they had the largest traffic last year that they ever had in the history of the lakes,. more than 120,000,000 tons.

Mr. WILLIAM E. HULL. If they are having such a traffic there, why would not that be an incentive for good argument to use for more waterways?

The CHAIRMAN. It might be and might not be; I am not saying. All I am talking about is the question as to Chicago.

Mr. WILLIAM E. HULL. This is not a Chicago bill. This is for the Mississippi Valley. I do not think it is fair to lay all this on Chicago.

The CHAIRMAN. There is no effort to do that.

Mr. WILLIAM E. HULL. Because the people in the valley I belong to are looking after the interests of the farmers in the valley, and they are the ones interested in this deep waterway. Of course, it is true that manufacturers in Chicago are largely handicapped on account of competition in the East, but what I am fighting for is a deep waterway to give the farmer relief and that has nothing to do with what Chicago shipped or did not ship. It is what the farmer wants to do in reducing the transportation cost of his grain and that is what we are fighting for.

The CHAIRMAN. We all sympathize with any effort to reduce transportation costs and we are all in favor of a waterway which will help solve the problem to reach that end. To get back to that end of it, we get back to a question about which there is no dispute here. We all agree that waterways-practical, feasible waterwaysare desirable. So far as the waterways is concerned, your question is how much water do you need? That is all there is to that aspect of the matter.

Mr. HAYNES. I think we ought to leave it this way at this point, with your persimmion, Mr. Chairman, and I have a letter here from the president of the Rutland-Lake Michigan Transportation Co.. plying between Lake Michigan ports and Montreal. I would like to read it into the record. I think all these lake ports on any of the Great Lakes will have an additional flow of traffic via any of the lakes to Chicago for interchange with this water route on the south. Therefore, all of these lake cities-Buffalo, and elsewhere, clear on to Ogdensberg on the St. Lawrence River-will have a direct water route and indeed are using it to-day as far east as Buffalo and as far west as the Missouri River via St. Louis and Texas points.

The CHAIRMAN. The difficulty there, as I understand it from the representatives of Milwaukee and all of the other ports who disagree with Chicago in that view, is that it will not benefit them. They think it will injure them and injure lake transportation.

Mr. HAYNES. That is not true as far as shippers are concerned who have investments at these cities. Their letters are in the record as put in by Mr. Rippin. The people that have investments do not take that view unless it is some others you have in mind.

Now, with the permission of the chairman, at this point I would like very much, because it seems to me to fit in right at this point, to file with the committee a letter from the Rutland-Lake Michigan Transit Co. addressed to Mr. Dempsey, from President A. C. Sulli

van.

(The letter referred to is as follows:)

RUTLAND-LAKE MICHIGAN TRANSIT Co.,

Chicago, Ill., October 15, 1923.

Hon. S. WALLACE DEMPSEY.

Washington, D. C.

DEAR SIR: This company has been asked to express its ideas in reference to the proposed improvement in the Illinois waterway, looking toward 9-foot stage of water between Chicago and the Gulf.