STATEMENT OF THEODORE BRENT, PRESIDENT COAST TRANSPORTATION CO.; TRAFFIC COUNSELOR, DIRECTOR OF MISSISSIPPI SHIPPING CO.; FORMER MEMBER UNITED STATES SHIPPING BOARD, NEW ORLEANS, LA.

Mr. BRENT. Senator Nye and gentlemen of the committee, the statement I will make is in the form of 12 propositions of fact. We do not attempt to justify the rivers and harbors improvements, but to show the facts as to their costs and their capacities to carry investment and some facts about the financial set-up, which we think justify the issuance of bonds. The facts are all taken from the last annual report of the Chief of Engineers, United States Army, as to the waterways, and the last annual report of the Secretary of the Treasury as to the finance.

First proposition. There are 614 river and harbor projects under improvement or maintenance in the continental United States.

An elaboration of that: All river and harbor improvements are by law placed under the supervision of the Corps of Engineers of the United States Army. The work in the continental United States is divided among some 42 districts. Each district engineer reports to a division engineer who in turn is under the direct supervision of the Chief of Engineers at Washington.

According to the report of the Chief of Engineers for the fiscal year ended June 30, 1931, there are 614 river and harbor projects either completed and under maintenance of the Engineer Corps or in partial operation or being prepared for navigation.

Below is a tabulation of the districts and the several projects under construction or maintenance adjacent to the Atlantic, Gulf, and Pacific coasts, the inland waterways, and the Great Lakes.

The Atlantic coast has 13 districts and 283 projects; the Gulf coast has 4 districts and 99 projects; the Pacific coast has 5 districts and 69 projects; the Inland waterways has 15 districts and 77 projects; and the Great Lakes has 5 districts and 86 prtjects; making a total of 42 districts and 614 projects.

The work assigned to the district engineers at and near the coast ports comprises the improvement and maintenance of harbors, the rivers connected with the harbors, and the interconnecting channels along the seacoast, such as the Cape Cod Canal, Long Island Sound, the Atlantic Deep Waterway, the Intracoastal Canal, and so forth. The only exception is as to the Mississippi River, which is divided at New Orleans between the harbor and an inland waterway project. The projects on the Great Lakes comprise both harbors and the improvement and maintenance of canals and connecting channels. The inland waterways comprise almost entirely the Mississippi River system, which includes not only the Missisippi River but the Ohio, Kanawha, Cumberland, Tennessee, Missouri, and Illinois Rivers and the canals and smaller rivers which are being improved and maintained in conjunction with the Mississippi River system. This single system itself is divided into some 77 projects, under the jurisdiction of some 13 district offices, and a part of the maintenance of which is being carried on by the Mississippi River Commission. Every project presently under construction has been subject to careful study by the Corps of Engineers, in cooperation with local, sectional, and national organizations. The authorization for the

improvements have been made after careful analyses of the reports of the district engineers. These reports are, in turn, reviewed by the Board of Engineers for Rivers and Harbors and finally approved or disapproved by the Chief of Engineers before they are presented to the Rivers and Harbors Committee of the House of Representatives, which finally passes upon and authorizes or disapproves the projects, after itself entering into exhaustive public hearings as to the merits or demerits of each project.

When a particular project is adopted and the money appropriated for active work, the construction is under the direct supervision of the district engineer in charge, whether it be by contract or through direct Government activity. All maintenance of projects within his district is also under the direct supervision of the district engineer and the majority of maintenance work is done by and under the supervision of the district engineer's organization.

The second proposition: The actual and estimated Government investment in all authorized river and harbor improvements, as of June 30, 1931, was: Expended on harbors and harbor entrances, $44,000,000; expended on rivers, canals, and connecting channels, $542,000,000; unexpended balance of appropriations, $50,000,000; amount necessary to complete authorized projects, $345,000,000; or a total investment of $1,382,000,000.

Senator VANDENBERG. That is covering what period of years? Mr. BRENT. From the beginning of recorded history. It goes back, as I recall it, to 1832; it goes back as far as the Engineer Corps's records go.

Senator VANDENBERG. That includes, then, a number of uncompleted projects?

Mr. BRENT. We will speak of the tragedies; we will speak of all the tragedies and the live ones. I just want to emphasize, however, that I have made a very careful study of every one of these projects, putting down their cost of maintenance and their annual carrying charges on the investment, and against them the recorded tonnage one by one; and I find there are very few of them that are in that category of tragedies, and those that are, are usually what may be termed branch lines, which in the conduct of railroads would be lumped in with the balance, or they are uncompleted projects.

According to the 1931 report of the Chief of Engineers of the United States Army, the total amount expended from the beginning of recorded operations to June 30, 1931, was as we have stated. These are the aggregates of the cost of new work, exclusive of the cost of maintenance and examinations. It represents the total expended both on existing projects and on previous projects. Of this amount, $312,659,362 represents the cost of previous projects, as distinguished from those now approved and known as "existing projects. Part of the capital invested in previous projects has contributed toward the development of existing projects. Considerable of it represents capital expended for work upon improvements which have become obsolete and have had to be abandoned, in favor of larger and more modern improvements.

Below is a tabulation of the expenditures upon previous projects in various districts. They are all listed here, but the Atlantic coast has expended on previous projects $84,000,000; on the Gulf coast, $37,000,000; on the Pacific coast, $18,000,000.

Senator NYE. Mr. Brent, the itemizing of that you are having made a part of the record?

Mr. BRENT. Yes. I am putting this in, in full. Inland projects, $141,000,000; Great Lakes projects, $30,000,000; or a total of $312,659,362.

The $17,657,200 expended on the Ohio River in the previous project was in an undertaking to secure 6-foot navigation, which afterward had to be abandoned in favor of the present 9-foot project, which has recently been completed. Under the new project some of the works had to be completely abandoned. Some dams of the older project are entirely submerged.

Much of the $32,806,876 expended by the Mississippi River Commission was used in experimental work, attempting to maintain a channel by dredging operations and other means which have proved ineffectual. The present plans call for the maintenance of 9-foot navigation through the installation of stream regulation and contraction improvements.

The $47,228,350 expended on the previous project on the upper Mississippi covered a period of 52 years, in which it was attempted to secure 6-foot navigation by regulation. It failed to secure a channel, as recorded in the findings of the special board of engineers. Their decision is (H. Doc. No. 137, 72d Cong., 1st sess., p. 1, par. 3): It is impracticable to secure an adequate channel by regulation and dredging.

House Document No. 290, Seventy-first Congress, second session, page 49, paragraph 703:

The present project is not adapted to modern needs. House Document No. 290, Seventy-first Congress, second session, page 49, paragraph 705:

* * * The present channel is not adequate to build up a commerce which will justify the necessary expenditures upon it for completion and maintenance.

* * *

These expenditures are similar in their nature to the relocation of a railroad in order to secure a line and gradient suited to modern travel and traffic. In such a case a very large portion of the old right-of-way and improvements are abandoned and an entirely new railroad built with new capital. The same is true of the State highway commissions in the development of arterial highways. Old roads are abandoned, new property bought and entirely new and modern roads built upon it. The same element of abandonment is often involved in harbor improvements. Old works become obsolete and new works, at larger expense, substituted.

While the 312 millions expended on previous projects is by no means all loss, there is an element of obsolescence in it which is inescapable in the development of public transportation facilities in any form.

The third proposition is: In the calendar year 1930 the waterborne commerce of the United States served by the river and harbor improvements consisted of: Imports and exports, 114,109,657 tons, valued at $7,513,000,000; coastwise, interport and local, 406,320,061 tons, valued at $12,611,000,000.

Exclusive of the exports and imports, the public savings resulting on the 406,320,061 tons of water-borne domestic tonnage at the most

conservative estimates available amounted in 1930 to $256,132,820. These savings were made possible by the existing river and harbor improvements.

Senator VANDENBERG. In which one of those divisions does the Great Lakes commerce fall?

Mr. BRENT. They are all there. I will speak of those in a moment. Senator VANDENBERG. All right.

Mr. BRENT. Under direction of Congress, the District engineers tabulate the traffic moving by water in their respective districts. The commercial statistics contained in the annual report of the Chief of Engineers summarize these tabulations. The final totals are carefully checked before publication to eliminate duplications, much as the annual statistics of railroads are segregated for similar purposes by the Interstate Commerce Commission.

The tonnage received and forwarded at the harbors is segregated between foreign, coastwise and other domestic traffic.

Part 2 of the 1931 annual report of the Chief of Engineers contains the commercial statistics of water-borne commerce of the United States for the calendar year 1930.

Below is tabulated the adjusted totals of such commerce.

In the ports of the Atlantic, Gulf, and Pacific, the imports amounted to 46,000,000-I do not give the values necessarily exports 48,000,000. We do not use those at all for purposes of giving public savings. The coast wise commerce was 117,000,000 tons; an average of $45 a ton in value, and a saving of 75 cents a ton, the total public savings in coast wise movement along the Atlantic, Gulf, Pacific coasts was $38,365,000.

Senator VANDENBERG. Where did you get the 75 cents a ton from? Mr. BRENT. I will explain that. I have it here very carefully

set out.

Senator VANDENBERG. I do not want to get ahead of you all the time.

Mr. BRENT. Certainly; I will explain it to you.

Total public saving in that internal coastwise movement along the Atlantic, Gulf, and Pacific coasts at a saving of 70 cents per ton is $17,800,000; local and intraport centers, 73,000,000 tons, of a value of $54 a ton, at 25 cents per ton saving, amounts to $18,866,000.

Now, the Great Lakes: Imports, 7,590,000 tons; exports, 11,923,000 tons. These are not used-interport, which is the Great Lakes traffic, it is 109,790,000 tons; total value at $12 per ton, 75-cent saving, amounts to $82,343,000. Local, 3,946,000 tons, at an average value of $1.60 a ton, at a public saving at 25 cents per ton, amounts to $966,000.

Mississippi River system, interport, 63,000,000 tons, value $12.50, at a saving of 75 cents per ton, amounts to $47,769,000; or a total annual public savings, based on 1930 tonnage of $256,132,000.

Eliminating entirely the export and import traffic served by the harbors of the coasts and the Great Lakes, and applying the nominal public saving of 75 cents per ton on coastwise and interport traffic, 50 cents per ton on internal traffic, and 25 cents per ton on local and intraport movements, the annual public savings to the citizens of the United States from this water-borne traffic is $256,132,820.

The coastwise commerce represents that moving between ports on the Atlantic and ports on the Gulf and ports on the Pacific, as well

as traffic moving coastwise between Atlantic and Gulf ports and between the ports on the Pacific and the Atlantic and Gulf through the Panama Canal.

The internal commerce is that which moves between a given port and near-by waterways upon which the port is situated, as between Baltimore and improved waterways connecting with Chesapeake Bay; traffic between Norfolk, Wilmington, and other ports and landings on the Atlantic Deep Waterway; schooner and motor-boat traffic from Jacksonville along the Indian River Canal; steamboat and motor-boat business between New Orleans and the bayous, bays, sounds, and lakes connecting with the port through locks and channels maintained by the Corps of Engineers.

The local and intraport business is the lighterage traffic within a single port or within a harbor, such as New York Harbor, which is made up of numerous water connections improved under a number of authorized projects both in New York and New Jersey. It is made up, for example, in New York in the harbor distribution by water of coal, gasoline, sugar, steel products, lumber, crushed stone, and the like, together with a large amount of miscellaneous merchandise and a considerable tonnage of ashes and other commodities which must be removed for the safety of the city. In the East River at New York alone this local, internal, and intraport traffic amounted, in 1930, to about 18,000,000 tons.

On the Great Lakes the interport traffic corresponds with the coastwise at sea. The local traffic is largely made up of local receipts of sand, gravel, and marine products at Great Lakes ports from quarries and gravel pits adjacent to the Lakes themselves and the connecting channels and tributaries of the Lakes.

On the Mississippi River system the interport traffic constitutes the movement between ports and into the ports between adjacent reaches of the river.

In estimating the public savings the minimum figure of 75 cents a ton has been taken as the measure, in the absence of any billing from which the actual savings, as against other means of transportation, could be figured. The conservatism of this figure is amply witnessed by the large movements of tonnage which are shown in the figures compiled by the Corps of Engineers.

The total savings for the Great Lakes, for example, on both interport, at 75 cents a ton, and local, at 25 cents a ton, amounts to slightly less than $83,000,000 annually. We know that the savings on the three great movements of ore, coal, and grain on the Great Lakes is much greater than this. In House Document No. 4, Sixty-ninth Congress, first session, the Board of Engineers for Rivers and Harbors states (p. 5):

Navigation on the Great Lakes: This is of immense volume and importance; the annual tonnage of freight on the Lakes, disregarding Canadian coastwise trade, is in the neighborhood of 125,000,000 tons per year, and careful studies indicate that its benefit of the Nation in direct savings is at least $125,000,000 per year, sufficient to amortize annually the entire first cost to the Federal Government of works of channel improvement on the Lakes and their connecting channels. * *

The 117,821,145 tons moving coastwise is made up of such items as 70,000,000 tons of petroleum and its products moving between ports on the Atlantic, Gulf, and Pacific, on which it is well known