It may be, of course, that railroad rates on water-adapted commodities went up less than 18.4 percent. We really do not know. Considering that water-adapted commodities are principally natural resource products (raw materials and fuels) underlying the entire superstructure of the economy, is the cost-recovery user charge a suitable mechanism for dealing with rising delivered costs of this class of goods?

At least tentative answers to these questions would appear essential to any informed decision as to cost-recovery waterway user charges or use taxes. As of the present, it would appear that, for the most part, these questions have not been systematically addressed. Until they are, no informed resolution of the question can be reached.

Mr. BARTLETT. Mr. President, there is one additional item which I would like to refer to which further reinforces the point which I am making. In 1976, the Corps of Engineers completed an analysis of rate adjustments of railroads competing with the McClellan-Kerr Waterway. This analysis clearly shows that the waterway has been beneficial to both shippers and consumers in holding down-rail shipping rates. I draw my colleagues attention to the conclusions of the report, found on page 16, which note reductions in rates or at least much lower rate increases when compared to railroads not in competition with the McClellan-Kerr Waterway.

Obviously, as the shipping rate on the waterway began to increase, the railroad shipping rates will correspondingly increase with a double impact upon all shippers and consumers.

Mr. President, I ask unanimous consent that the McClellan-Kerr Arkansas River System Rate Adjustment Analysis be printed at this point in the Record.

There being no objection, the analysis was ordered to be printed in the Record, as follows:

MCCLELLAN-KERR ARKANSAS RIVER SYSTEM RATE ADJUSTMENT ANALYSIS

Who is benefited when a new navigation channel is constructed? This has been the question of growing concern which characterizes most discussions on inland navigation. In an effort to establish recipients of transportation savings or reduced freight charges, the U.S. Army Corps of Engineers initiated a rate adjustment analysis for traffic utilizing the McClellan-Kerr Arkansas River Navigation System. The analysis will involve commercial commodity movements into and out of the study area.

The study area is located along the main stem of the Arkansas River and encompasses the large trade centers of Little Rock and Forth Smith, Arkansas and Tulsa, Oklahoma. The study area covers 40 counties in Arkansas and 23 counties in Oklahoma.

The origin and destination of commercial commodity movements indicate that unfabricated iron and steel products originate primarily from major steel producing states, predominately Ohio, Illinois, Pennsylvania, and West Virginia. Fabricated metal products originating in the study area were shipped world wide. The remaining commodities were transported to and from the study area originated in or destinated to 50 states and 48 foreign nations. Imports and exports for commerce in the study area drew heavily from the European common market and the expanding Japanese market.

Data for major commodity movements in the study area were generated by a field survey of firms located or operating in the area for calendar year 1971. Approximately 100 firms were canvassed to collect commodity data which included the commodity, origin, destination, volume, and rate if known, and other information made available for commodity evaluation. An examination of the raw data indicated that 590 individual commodity movements were collected. These cargo movements and commodity types were considered readily adaptable for bulk barge movement. The major commodity movements utilized in making this evaluation are presented in the following table.

Based on the above commodity movement the US Army Corps of Engineers contracted with North Texas Traffic Bureau, Dallas, Texas, to obtain historic rail rates from 1 January 1967 to 1 February 1974. The contract was prepared in two volumes and is presented as an appendix to this evaluation. After duplicate movements and special one-time shipments were removed from the analysis, the commodity movements were reduced to 536. The specific data requirements and format requested from the contractor are presented in the following example:

EXAMPLE-COMMODITY: BEAMS, STRUCTURAL STEEL FROM HOUSTON, TEX., TO TULSA, OKLA.

Legends: Cents per 100 pounds; N.T.-Cents per ton of 2,000 pounds; G.T.-Cents per ton of 2,240 pounds, S.C.-Surcharge; (1) Rate on minimum weight; (2) Rate on execss of minimum weight; MCofC-Marked capacity of car; TCTank car; R-35-Rule 35 of uniform freight classification-Minimum weight on shipments in tank cars; R-35-._M-Rule 35 but not less than pounds.

The 536 commodity movements were utilized for this analysis. The following tabulation presents the number of specific commodity movements for each category of commodity.

During the calendar year of 1971 an estimated 50 million tons of commercial cargo was transported to and from the study area. Railroad traffic accounted for 18.9 million tons of cargo, Highway and truck traffic accounted for 25.3 million tons of commercial cargo, waterway traffic amounted to 4.3 million tons of cargo and commercial and general aviation accounted for 1.5 million tons of commercial cargo. Of the total commercial tonnage, 5 percent or 2.5 million tons of cargo represents the survey sample and were analyzed in this study.

Evaluation of the raw data developed by the contractor, indicates that of the 536 commodity movements sampled, 29 percent or 158 individual commodity movements reflected regulated rate adjustments during the period of analysis. All the commodities which reflect rate adjustments were from the iron and steel category. Iron and steel products with long line-hauls were the primary source of rail rate adjustments.

Rate adjustments to meet highway competition were reflected in 132 specific individual commodity movements. These commodities were of the iron and steel category and amount to about 25 percent of the total sample. The rate adjustments represent approximately a 10 percent across the board decrease for these commodities. In most cases the rail rate adjustments were placed into effect in June and December 1972. The effective rate adjustments corresponds to the first complete year of operation for the navigation system. Rate adjustment proposals were filed with I.C.C. about the time that construction on the navigation system was being completed. Since iron and steel products account for approximately 22` percent of the study area's commercial cargo, the transportation savings to the national account, as a result of rail rate adjustment, could be enormous.

Twenty-six (26) individual iron and steel movements, or about 5 percent of the total sample, reflected rail rate adjustments. The shipments were extra long linehaul commodities used primarily for product fabrication. The reason presented by the railroad industry in their rate adjustment proposal to the I.C.C. was to meet waterway competition. The industries proposal was filed about the time construction was being completed on the navigation system, however, the effective dates of rail date adjustments were during the first two years after project completion or late 1971 and early 1972. The iron and steel commodities used in this sample represents approximately 5 percent of the total tonnage for the study area. Rail rate adjustments to meet barge competition were reduced by about half of the preproject rail rate, i.e., $21.00 per net ton to $11.77 per net ton. The following tabulations on pages 9-13 present the commodity movements which reflect rail rate adjustment to meet highway and barge competition. Further evaluation of the remaining 378 commodity movements indicates that the general rate of traffic increases for the eastern section of the United States were generally higher than for those rail rates in the study area. The table on page 14 presents general rail rate increases.