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We are operating ships in the Great Lakes and St. Lawrence, general cargo trade, touching Ogdensburg, N. Y., and Montreal, and do a considerable business in westbound freights from New England, interchanged at Ogdensburg, and also import business by way of Montreal. A considerable proportion of our freight is destined to St. Louis and other points in that vicinity on or adjacent to that waterway. In our opinion the improvement contemplated would be of very great benefit in reducing freight costs on the freight we handle to St. Louis and those other points by transshipping the freight at Chicago into barges or other ligliters. At the same time it would afford an outlet to St. Louis millers, manufacturers, and others engaged in the export trade, in the way that it would give them an additional outlet in the way of a cheap all-water transportation to the seaboard.

A considerable part of our eastbound traffic is grain and grain products. The improvement of the waterway would bring to all points on the waterway a direct outlet to terminal markets, such as Buffalo and Montreal, for all grains and grain products. Very truly yours,

RUTLAND-LAKE MICHIGAS TRANSIT Co.,

By A. (. SULLIVAX, President. I might say that Mr. Sullivan and his company are experienced seamen and have been in the lake business for many year's.

STATEMENT OF MR. P. J. GRANT, REPRESENTING ERIE CHAMBER

OF COMMERCE.

Mr. GRANT. They have not been in the package freight business very long, only this past year, and operate only four canal-sized boats, 262 feet long-only four of them.

Mr. HAYNES. Their investment exceeds over a $1,000,000 and they are holding themselves out to handle all traffic.

Mr. GRANT. Not on package freight.

The CHAIRMAN. What is the largest shipping agency of the Great Lakes?

Mr. Grant. The Great Lakes Transit Co. is the largest package freight carrier.

Mr. HAYNES. I might say at this time, at the opening of navigation this year, the Rutland Lake Michigan Transit Co. has already announced a service three times a week both eastbound and westbound. Their investment in boats exceeds over a $1,000,000. They are carrying joint rates from all of New England and New York.

The CHAIRMAN. Do they have any boat that could navigate over a 8 or 9 foot channel?

Mr. HAYNES. I could not answer that.
Mr. SWEET. Fourteen feet?

Mr. WILLIAM S. ARDERN (Milwaukee, Wis., vice president and general superintendent Milwaukee Western Wisconsin Fuel Co., president Milwaukee Harbor and Rivers Association. Yone at all.

Mr. HAYNES. I think their interchange would have to be at Chicago with the barge line. I might say that everything east, north, and east of Pittsburgh, drawing a line from Pittsburgh to New York to the Canadian border, working in connection with this line, the Great Lakes Transit Co. through Buffalo, through Ogdensburg, through Oswego, in connection with lake lines and movements from the textile and big manufacturing interests of eastern territory rail and lake and rail beyond, fans out clear into Montana and Wyoming.

The CHAIRMAN. Where do they run from rail to rail? What are their terminals?

Mr. HAYNES. The biggest boat goes from Duluth,
The CHAIRMAN. Duluth to where?
Mr. HAYNES. Between Duluth and Buffalo, in the main.

Due to the loss of business by the change in the currents of traffic occasioned by the low rates and increase of intercoastal steamship service via the Panama Canal a number of conferences of middle western shippers were held during 1923.

It is the conviction of commercial interests throughout the Mississippi Valley that existing ocean competition has come to stay and will continue to place out of reach of the transcontinental rail carriers the business which originates at the Atlantic seaboard and in territory adjacent thereto and will make it increasingly difficult to regain that 'tonnage now moving via the Panama Canal from the Middle West. The following organizations have given serious consideration to canal competition and look for relief through development of our inland waterways:

Chicago Association of Commerce, (hicago; Burlington Shippers Association, Burlington, Iowa ; Davenport (hamber of Commerce, Davenport, Iowa ; Cedar Rapids Chamber of Commerce, Cedar Rapids, Iowa; Sterling Manufacturers' Association, Sterling, Ill. ; Quincy Freight Bureau, Quincy, Ill.; St. Paul Association, St. Paul, Minn. ; Minneapolis Traffic Association, Minneapolis, Minn.; Springfield Chamber of Commerce, Springfield, Ill. ; Fort Smith Traffic Bureau, Fort Smith, Ark. ; Memphis Freight Bureau, Memphis, Tenn. ; Omaha Chamber of Commerce, Omaha, Nebr. ; Duluth Chamber of Commerce, Duluth, Minn. ; Peoria Association of Commerce, Peoria, Ill. ; Rockford Manufacturers and Shippers' Association, Rockford, Ill. ; Kansas City Chamber of Commerce, Kansas City, Mo. ; St. Joseph Chamber of Commerce, St. Joseph, Mo. ; Sioux City Chamber of Commerce, Sioux City, Iowa ; East Side Manufacturers' Association, Granite City, Ill.

I might say in passing that all the principal cities in Wisconsin, Minnesota, Illinois, Iowa, Missouri River cities, and as far east as Buffalo and Pittsburgh, participated in those conferences. It is not really with our manufacturers and shippers; it is a condition growing very acute, and we believe that if it continues with possibility of distributing manufacturing enterprises and the ability to produce over a more widespread area it will concentrate around the shore lines with this cheaper water transportation.

The CHAIRMAN. That is distribution on the two shores?
Mr. HAYNES. Yes.

Mr. WILLIAM E. HULL. If such would be the case, would not it in time practically discontinue the growth of the western cities from Pittsburgh to the California line? If what you say is true, it would discontinue the growth of Peoria and Des Moines and that class of cities, because if we can not compete with our manufacturing industries we can not grow.

Mr. HAYNES. That is correct.

The CHAIRMAN. The only trouble is that all statistics up to the present time contradict that, because there has been a steady growth.

Mr. WILLIAM E. HULL. You did not have the Panama Canal until lately.

The CHAIRMAN. How long have you had it?
Mr. HAYNES. Since the war.
Mr. WILLIAM E. HULL. Only recently.

Mr. HAYNES. This situation has been growing more acute. To-day we have, according to the last figures, 151 ships plying in the trade between the intercoastal service, and that is working back, the backwash is working back into the interior as far from New York as the Missouri River. In other words, you can take freight from the Missouri River in many cases and send it all rail to New York and put it on the ship there and send it through the Panama Canal to the Pacific slope at a cheaper cost than you could go overland direct.

Mr. WILLIAM E. HULL. Is it not true that some of the manufacturers from Chicago have moved a portion of their plant to eastern points like Bridgeport in order to compete with the eastern coast?

Mr. HAYNES. That is correct, and I would like to give one example at this point. I will give on specific example. Crane & Co. are manufacturers of pipe fittings, valves, and plumbing, goods in general. They established plants before the Civil War in the Chicago district. These plants were built and designed to supply the territory west of Chicago to the Pacific coast. At the same time, or soon thereafter, they built a plant at Bridgeport, Conn., for the purpose of supplying New England and eastern territory with supplies.

In the last three years 52 per cent of the production of the Chicago plant has been allocated to Bridgeport, thereby taking those men and deteriorating the plant to that capacity of production by making it necessary to enlarge by a capital expenditure at Bridgeport for the purpose of supplying the territory west of Salt Lake City, Utah.

The CHAIRMAN. Suppose that Crane & Co., instead of enlarging their works at Bridgeport, had built a new plant at St. Louis, Mo., on the present route of the barge line, could the St. Louis plant have competed with the Bridgeport plant on shipments to the Pacific coast?

Mr. Haynes. Yes; and they are to-day competitors at St. Louis.

The CHAIRMAN. Is not the rate higher from St. Louis by barge line and including the transfers to the Pacific coast than it would be from the Bridgeport plant; considerably higher?

Mr. Haynes. I am told by Mr. Coyle, traffic commissioner of the St. Louis Chamber of Commerce, that he has to-day all-water rates from St. Louis to the Pacific coast on the same basis as all-water rates from New York. I have not checked them up, but I am told that by their traffic commissioner.

The CHAIRMAN. Where do they transfer, at New Orleans?
Mr. Haynes. Yes.

Mr. O'Connor. I will be glad for you to put statistical information on that subject in the record. It is a very interesting point brought out.

Mr. WILLIAM E. Hull. If we had this waterway from Chicago to New Orleans, with the barge line as contemplated, would not that dominate the rate, not only the water rate, but the railroad rate from any point along the water route east or west?

T'he CHAIRMAN. That is a pretty big question.
Mr. HAYNES. It would be a big factor.

Mr. William E. HULL. I will answer that question myself, because when I was in business in Peoria I could have a water rate on account of a small barge line running from St. Louis to Kansas City I helped to build, so that we received a railroad rate to compete with the water rate to that point. The same thing applied from Peoria to San Francisco, because we were on the Illinois River and could ship in the summer time to New Orleans, so that we could get a freight rate from Peoria to San Francisco of $1.50 a hundred and we had to pay a freight rate of $1.75 a hundred to intermediate points, such as Denver, so if you have a water rate along your section you are always bound to have a rail rate to meet the water rate.

The CHAIRMAN. What about the water rate from Chicago to New York, and then from New York to the Pacific coast, as compared with the all-water rate from St. Louis to the Pacific coast? Will you give us those figures ?

Mr. HAYNES. Yes; I can furnish those. The lake and rail rates?
The CHAIRMAN. I mean the lake and barge rate.
Mr. Haynes. I will be glad to furnish it.
The CHAIRMAN. I know the lake and rail rate would be higher, of

course.

can.

Mr. HAYNES. I might say that since we built the New York Barge Canal that our shippers are using it in every case that they possibly

The CHAIRMAN. The traffic has been increasing quite rapidly.

Mr. HAYNES. After meetings with hundreds of manufacturers and shippers of the above organizations it was clearly shown that business is progressively being lost to eastern competitors who use, in a larger measure, the water routes on account of the proximity to the sea. If substantial relief is not accorded to the inland manufacturers, producers, and shippers production will continue to decline, resulting in centralizing business at or near the shore lines to the detriment of the interior.

Middle western manufacturers, producers, and shippers feel that it is unfair for the Government to allow established industry to suffer due to an agency such as the Panama Canal, which is revolutionizing the trend of American transcontinental commerce, when the means for equalizing the interior is available in the completion of our inland waterways.

Mr. Rippin, speaking for the Mississippi Valley association, has already pointed out that adequate terminals have been provided at points out where the water service is now connected with the rail and that that would follow at all points at which the service is extended.

The CHAIRMAN. I have before me the report of this waterway showing the amount of diversion needed. The question here before the committee is the amount of the diversion to be permitted, and I am referring now to Document No. 1374, Sixty-first Congress, third session. I do not think we are in dispute about almost all of these matters, matters which we have been discussing. I think we are in agreement and accord.

Mr. HAYNES. I hope so.

The CHAIRMAN. The question is, conceding that your waterway or improvement of Illinois River is desirable and advisable, how much water do you need? Of course, this committee has to refer to the Chief of Engineers, as he is the official adviser, and if he says that such a waterway will not require a diversion of more than 1,000 second-feet from Lake Michigan and this amount would not injuriously lower the lake level or cause excessive flooding of lands in the Illinois Valley, suppose the committee agreed unanimously that the improvement of the Illinois River was desirable to the extent recommended by the engineers and on the basis of the report of the engineers it would take 1,000 cubic feet and permit the diversion of 1,000 cubic feet for that purpose, that would answer all of the arguments as to the commercial advantages, would it not?

Mr. HAYNES. I would not assume so.

The CHAIRMAN. Then we would come to the question of how much water you need for that sanitary canal. That is the question in dispute here. That is the question that is before us, because I assume that the majority of this committee will probably agree with the engineers in their recommendations.

Now, whether they want to go any further depends upon the needs of the sanitary district, and that seems to me to be the question that should properly be taken up for discussion here.

Mr. HULL. Mr. Chairman, let me ask a question. Do you contemplate that 1,000 cubic feet will carry on a 9-foot channel?

The CHAIRMAN. What they have recommended is an 8-foot channel. Now, how much more it would take for a 9-foot channel I can not estimate. I should not suppose it would take any appreciably larger amount; because we have found here this morning that the Erie Canal, 12 feet deep, takes only from 1,200 to 1.700 feet : that it varies between those limits. So the amount of water necessary for the improvement of the Illinois River would be somewhere in the vicinity of 1,000 feet, or, to put it at the outside, 1,200 cubic feet. Now, what is asked here is 10,000 cubic feet. That is a very different thing, and of course a different question comes in-the sanitary needs of Chicago.

Mr. HAYNES. Mr. Chairman, as I said at the outset, I am not an engineer and can not testify along the technical lines that you refer to, and we will cover that by appropriate witnesses. But we would like to leave this thought with you: That regardless of the amount of water necessary for the sanitary question, the big thing that is involved here, the thing that affects all the people, and the thing that will be of benefit to commerce in general is the question of additional transportation in the interior.

The CHAIRMAN. And you would like a 9-foot waterway, and if you can not get that at once and we are in a position where we have to send it back for survey, you would like an 8-foot waterwav; but you would like the 9-foot waterway as soon as you can get it? Mr. HAYNES. That is it.

The CHAIRMAN. And you would like as much water, either for an 8-foot or 9-foot waterway, as possible?

Mr. HAYNES. Yes, sir.

Mr. Shaw. Mr. Chairman, the committee might be interested in knowing the amount of water that is now used at the Soo, and that will be found in the report.

The CHAIRMAN. That is 500 cubic feet, is it not?

Mr. Shaw. It is a little more than that; but it is a comparatively small amount.

The CHAIRMAN. I saw in some document here I think it was the treaty—that it provides for 500 cubic feet.

Mr. Shaw. If I may add this further thought, Mr. Chairman: If I understand the details of this proposal, we might be interested in knowing the velocity that the water would have in this proposed canal if 10,000 cubic feet per second were diverted through it. I am a little fearful that the velocity might be such that we would find it difficult to use the canal.

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