struction and repair of the prison or of other public buildings, roads, parks, and other permanent public structures.

The contract system, the piece-price system, and the lease system are susceptible of grave abuses and have been abandoned by many States.

The general tendency among a considerable percentage of the States is to develop the State-use system and the public works and ways system.

Under either of the last-mentioned systems, the competition of convict labor with free labor, and the competition of convictmade products with the products of private manufacturers, is reduced to a minimum.

Under the provisions of this bill each State will be enabled to decide for itself the policy of manufacture and sale of prison-made products within its own limits. With this protection I believe the individual States will gradually work out a system that will provide some compensation for the labor of their convicts, some of this compensation to be applied to the care of the convict's dependents and the remainder paid to the convict when he is discharged in order that he may have a small sum of money to assist him in again taking his place in society.

This measure protects free labor and free industry and at the same time is a constructive step toward more humane and just opportunities for the unfortunate man and his more unfortunate dependents.

INLAND WATERWAYS CORPORATION

Mr. RAMSEYER. Mr. Speaker, I call up House Resolution 198. a privileged resolution from the Committee on Rules. The Clerk read as follows:

House Resolution 198

Resolved, That upon the adoption of this resolution it shall be in order to move that the House resolve itself into the Committee of the Whole House on the state of the Union for the consideration of H. R. 13512, to amend the act entitled "An act to create the Inland Waterways Corporation for the purpose of carrying out the mandate and purpose of Congress, as expressed in sections 201 and 500 of the transportation act, and for other purposes," approved June 3, 1924. That after general debate, which shall be confined to the bill and shall continue not to exceed two hours, to be equally divided and controlled by those favoring and opposing the bill, the bill shall be read for amendment under the five-minute rule. At the conclusion of the reading of the bill for amendment the committee shall arise and report the bill to the House with such amendments as may have been adopted, and the previous question shall be considered as ordered on the bill and the amendments thereto to final passage without intervening motion except one motion to recommit.

Mr. RAMSEYER. Mr. Speaker, this resolution which has just been read makes in order the consideration of the bill H. R. 13512, which among other things increases the authorized appropriations for the Inland Waterways Corporation from $5,000,000 to $15,000,000. The bill consists of two sections. The first section is an amendment to an existing section in the law and the second section in the bill is an amendment to another section of existing law. The second section has six paragraphs to it, designated from (a) to (f), inclusive. Paragraph (a) and paragraph (f), the report states, are existing law, while the other paragraphs, (b), (c), (d), and (e), are additions to existing law.

I have no desire to discuss the merits of the pending bill. I just wish to call attention to two things touching procedure here in the House, and I would like the special attention of members of the Committee on Interstate and Foreign Commerce on the matters I am about to discuss.

One day several months ago, after some discussion in the House, it became the accepted policy of the House that bills reported to amend existing statutes should carry cross references to the new United States Code. This bill does not carry them, but I called the attention of members of the Committee on Interstate and Foreign Commerce to this omission when they were before the Rules Committee, and they agreed to see to it that the bill was properly amended to carry the cross references to the United States Code.

A few years ago when I presented a rule making in order the consideration of a bill in charge of this Committee on Interstate and Foreign Commerce I called attention to another matter of procedure which the committee then agreed should be followed, and that is that when a bill is reported amending existing statutes that the report should show by stricken-through type, italics, or otherwise just what changes were proposed to be made in existing law. Sometimes the Committee on Interstate and Foreign Commerce follows that practice. I have not reported a bill from the committee of which I am a member

for five or six years that did not show in the report just in what way we proposed to amend the sections of existing law, so that Members could see on reading the report just what changes were to be made in existing law.

In view of the fact that we have been rather unsuccessful in

getting voluntary action along this line from the committees, after months of labor and consultation with Members of the House and the legislative council and the parliamentary clerk, I drafted a new rule which I am going to read. It is short. I do not intend to comment upon it to-day, but I do think that it is highly important and would add much to the orderly consideration of bills if the committees were required by the rule to show in their report just in what way the statute or statutes under consideration is or are to be amended. A number of State legislatures require that to be shown in the bill. The State of New York and the State of Vermont at least require bills whose purpose it is to amend existing statutes to show by stricken-through type what is to be lifted out of existing law and by italies or other typographical designation what is to be added to existing law. I am advised by members of the legislatures from those two States that it adds very much to the orderly procedure and the careful consideration of bills. Mr. BLACK of New York. Mr. Speaker, will the gentleman yield?

Mr. RAMSEYER. Yes.

Mr. BLACK of New York. The Committee on Revision in adopting the code adopted the New York system in respect to bills. The New York system brings out what the gentleman would like to have brought out. When we amend existing law in New York State by striking out any of the existing law we put the part stricken out in brackets and then leave the other in the old type. If we add new matter, we put that in italics. Everything appears plainly on the face of the bill.

Mr. RAMSEYER. I have bills showing that from the Legislature of New York in my office. I think it is a wise practice. However, here we sometimes have such long bills, complicated bills, such as the revision of the revenue laws or the tariff laws or the transportation laws, that it might be confusing to use only devices followed by the Legislatures of New York and Vermont. So my rule is drawn so broad as to take care of every situation that may arise in committees of the House. Let me read this proposed rule:

House Resolution 164

Resolved, That Rule XVIII of the Rules of the House of Representatives be amended by inserting a new paragraph following paragraph 2, which shall be known as paragraph 3 and shall read as follows:

"3. Whenever a committee reports a bill or a joint resolution repealing or amending any statute or portion thereof it shall include in its report or in an accompanying document

"(1) The text of the statute or part thereof which is proposed to be repealed; and

"(2) A comparative print of the bill and of the statute or part thereof proposed to be amended, showing by stricken-through type and italics, parallel columns, or other appropriate typographical devices the omissions and insertions proposed to be made."

I introduced this resolution on April 13, 1928, about a month ago. I have not pressed it before the Committee on Rules, but I think that either in the closing days of this session or at the opening days of the next session I shall insist on the consideration of the proposed rule by the Committee on Rules. I am simply calling attention to it now, so that Members of the House who are listening to me may think about it, and if they have any suggestions to make in regard to the proposal I wish they would submit them to me.

Mr. ABERNETHY. Mr. Speaker, will the gentleman yield? Mr. RAMSEYER. Yes.

Mr. ABERNETHY. I notice that this is a bill of some length. Could the gentleman give the House in concrete form just what changes have been made?

Mr. RAMSEYER. That will be done in general debate by members of the committee who have had that matter under consideration for years.

Mr. KINDRED. I notice in the minority views that they discuss at some length what seemingly is a deficit in the operation of this corporation.

Mr. RAMSEYER. If the gentleman's question goes to the bill, I wish he would withhold it until the Members discuss it in general debate.

Mr. KINDRED. Very well.

Mr. RAMSEYER. Mr. Speaker, I reserve the remainder of my time and yield 10 minutes to the gentleman from Alabama [Mr. BANKHEAD].

Mr. BANKHEAD. Mr. Speaker, I regard this piece of legislation presented here by the Committee on Interstate and Foreign Commerce as one of the most important pieces of legislation that we have considered at this or any other session of Congress. It relates to a question of supreme importance to all interests in that section of the country where the streams are upon which these barge lines are to be operated. As will be pointed out to you by the members of the committee in general discussion of the bill, it is a matter of particular importance to the agricultural interests of the great Mississippi Valley and the Northwestern States.

This barge-line system, as most of you know, came into the hands of the Government for Government operation as a result of the return of the railroad companies of the country to private operation after the World War. Under the general provisions of the railroad transportation act, which was in effect during the war, the Government took over and undertook to operate the very inadequate facilities that were in hand for the operation of inland water transportation. It was, of course, totally inadequate for any real experiment or for any effectual use; but when we came to turn the railroads back this surplus waterway property was found in the control of the Government, and in the wisdom of Congress it was determined to make an experiment in the nature of Government operation of these inland waterways facilities, which the Government owned. A Government-owned corporation was formed with a capital stock of $5,000,000, and the operation of the barge-line system was put under the control of the War Department. With the facilities they had in hand-crude, meager, inadequate-the War Department made a remarkable showing under the adverse circumstances of a temporary operation of this waterway system.

The experiment thus far made by the Government has been sufficient to show that if you will give to this inland waterway transportation an additional appropriation of $10,000,000 for the purpose of providing adequate facilities for transportation, this proposal can be converted under Government operation, if you please, into one of the greatest advantages we have ever had, particularly to the agricultural interests of the Mississippi Valley as well as to the commercial interests to some other sections of the country. The evidence before the committee, as it will be presented to you, will show that by virtue of the competitive freight facilities offered by this inland waterway transportation the average freight cost on each bushel of wheat raised in that great section of the country contiguous to the Mississippi and its tributaries is actually reduced by from 2 to 3 and more cents on every bushel of wheat, and the farmer saves that much on every bushel; and the evidence is that that benefit actually goes back into the pockets and the profits of the farmer.

I have forgotten the exact figures, but they will be presented to you later. They will largely show that by the operation of this barge-line system there is saved to the shippers of the country through this competitive system in actual freight rates many millions of dollars to the producers and business interests of the

country.

Mr. ABERNETHY. Mr. Speaker, will the gentleman yield? Mr. BANKHEAD. Yes.

Mr. ABERNETHY. Will the gentleman tell me whether or not the area to be served by this barge line has been increased by this bill, or is it still confined to the Mississippi River?

Mr. BANKHEAD. No. That is one of the main features of the bill. Not only the Warrior River and the lower Mississippi to New Orleans are involved, but under contemplation is the improvement of the upper Mississippi tributaries as far as Minnesota; and in that great reach of northwest territory as soon as we have spent the money we are now spending to make those streams navigable these barge-line facilities will be made available.

I think this matter should be investigated before we spend $5,000,000 more. He allowed a barge line to be destroyed on the inland waterways.

Mr. WAINWRIGHT. I think the gentleman is doing General Ashburn a great injustice. Mr. BANKHEAD. I am not familiar with the controversy;

but, be it as it may, I do not think it should be used to retard this enterprise for the benefit of the country.

Mr. LAGUARDIA. Is it not true that this transportation was taken away, as indicated by the gentleman from North Carolina, at the request of the local people down there?

Mr. NELSON of Missouri. I understood that the statement was made that the establishment of the barge line would mean a saving of 2 or 3 cents a bushel on wheat? Mr. BANKHEAD. Yes.

Mr. NELSON of Missouri. In speaking at Kansas City, at the great meeting we had three years ago, Mr. Hoover, the Secretary of Commerce, said it would make a saving of 7 cents a bushel.

Mr. BANKHEAD. That is a remarkable statement which is now put in the RECORD by the gentleman from Missouri, and if it is true and I have no doubt it is true if he states it after examination-you can see what a tremendous saving there will be on the transportation of these agricultural products.

Mr. NEWTON. Mr. Speaker, will the gentleman yield?
Mr. BANKHEAD. Yes.

Mr. NEWTON. I will say to the gentleman that would be the case in wheat originating in the northern part of the country. Transportation by way of the river would mean a saving of about 9 cents.

The SPEAKER. The time of the gentleman from Alabama has expired. Mr. BANKHEAD. May I have two minutes more? Mr. RAMSEYER. I yield to the gentleman two minutes

more.

Mr. BANKHEAD. I did not intend really to undertake to discuss the merits of this proposal. I am sure, if you will listen to the statements concerning this proposal, you will be convinced that with this expenditure, with a small amount of Government credit, a tremendous advantage will be given to the business interests of that section of the country, and it will demonstrate that Government operation of a utility, at least temporarily, if properly exercised, can be effectively and successfully accomplished, because they are already making profits to the Government by this proposal. It will also demonstrate that if the time ever comes when it will be feasible and proper for the public interest, this barge-line system can be taken over by private enterprise and successfully operated as public carriers.

Mr. WRIGHT. Mr. Speaker, will the gentleman yield there? Mr. BANKHEAD. Yes.

Mr. WRIGHT. What streams are affected by this barge line?

Mr. BANKHEAD. The principal streams at the present time are the Warrior River and the Alabama River in Alabama. I will ask my colleague Mr. MCDUFFIE what is the canal bet ween the Warrior and New Orleans?

Mr. BANKHEAD. It is not my bill.

Mr. ABERNETHY. I will support it because it favors the gentleman's section, but I do want to say for the benefit of the gentleman from Alabama and of the country that General Ashburn, the man who is back of this legislation, allowed the transportation to be taken off the inland waterway from Baltimore to the South, and he has done nothing to restore it. Now, you are extending it there, and we are spending millions of dollars on the inland waterways of the Atlantic coast, and you are asking to have $5,000,000 more for this corporation of General Ashburn's, and yet you are doing nothing to restore the waterway that he caused to be abandoned.

Mr. WAINWRIGHT. Right there, I do not think General Ashburn has had anything to do with that.

Mr. MCDUFFIE. The Mississippi proper, from Mobile_and Ponchartrain. The other rivers are the Tombigbee and War. rior, and then on the Mississippi from St. Paul down to New

Cor

and

the transportation act, and for other purposes," approved June 3, 1924.

The SPEAKER. The gentleman from New York moves that the House resolve itself into Committee of the Whole House on the state of the Union for the consideration of the bill H. R. 13512. The question is on agreeing to that motion.

Mr. PARKER. Pending that motion, and before going into committee, Mr. Speaker, I would like to make a unanimousconsent agreement as to the division of time. I propose one hour to a side, half of the time to be controlled by myself and one-half to be controlled by the gentleman from Connecticut, in opposition to the bill. The only Member in opposition is the gentleman from Connecticut [Mr. MERRITT].

Mr. EDWARDS. Reserving the right to object, Mr. Speaker, how long does the gentleman expect to run this afternoon? Mr. PARKER. We hope to finish the bill to-night. We hope we will not have to use all the time.

The SPEAKER. The gentleman from New York asks unanimous consent that the time be divided equally between himself and the gentleman from Connecticut, as permitted by the rule. Is there objection?

There was no objection.

they had been operated by the Secretary of War through a bureau here in Washington, but it was found they could not be operated through that bureau along business lines or upon business principles, because it was subject to all the delays and dithculties that accompany any attempt to carry on any sort of business by a Government bureau. So in order to put it upon a better business basis the act of June 3, 1924, was considered by our committee, reported to the House, was passed, and became a law. That act provided for the creation of the Inland Waterways Corporation. It was given a capital stock of $5,000,000, all of which was taken by the Government. It provided that this corporation, of which the Secretary of War is the head, should take over all of the water craft that belonged to the Government; it provided for its appraisal, its set-up as a corporation, and instructed it to continue to operate these facilities on the lower Mississippi River and on the Warrior River. It also provided for the operation of a system of barges on the upper Mississippi from St. Louis to St. Paul and Minneapolis. Now, before that time it had been operated at a loss. The facilities which were taken over during the war were, of course, in many instances, unfit for service. We had to improve them as much as possible and then we had to enter into contracts for

The motion was agreed to.

Accordingly the House resolved itself into the Committee of the Whole House on the state of the Union for the consideration of the bill H. R. 13512, with Mr. FROTHINGHAM in the chair. The Cleik read the title of the bill.

Mr. PARKER. Mr. Chairman, I ask unanimous consent that the first reading of the bill be dispensed with.

The CHAIRMAN. The gentleman from New York asks unanimous consent that the first reading of the bill be dispensed with. Is there objection?

There was no objection.

Mr. PARKER. Mr. Chairman, I yield 25 minutes to the gentleman from Illinois [Mr. DENISON]. [Applause.]

Mr. DENISON. Mr. Chairman and gentlemen of the committee, I hope I may have the attention of those of you who are here, because the bill presents legislation of very great importance to the country.

This bill presents for your consideration a very important business of the Government. There is no politics in it. There is nothing that involves any question of constitutionality; it is a plain business proposition of trying to do something to enable the Government to run more successfully a great business enterprise until its purpose has been accomplished.

The first question that presents itself is: What is the Inland Waterways Corporation? I shall discuss that for just a moment and then I will discuss the question of what the purpose of the Inland Waterways Corporation is. Then I shall briefly discuss the purpose of this legislation.

During the war, when the railroads found themselves unable to carry on the transportation business of the country, the Government seized all of the facilities of the railroads. The Government took them over and continued their operation by the Government. Among other facilities that were taken over, were a great many barges, towboats, tugs, and other water craft that were on the New York Barge Canal and on other inland waters of the country. When the Government found itself in possession of all these various facilities the Director General of Railroads appointed a manager to take charge of these water craft and operate them in order to relieve the railroads as much as possible of the extra work that they had to perform in carrying on the war. These facilities were gotten together and operated on the Warrior River for about 440 miles from Mobile up to the neighborhood of Birmingham, Ala.; also on the lower Mississippi from St. Louis to New Orleans. The manager who was operating under the Director General of Railroads did the best he could during the war period, and then when the war was over these facilities were still operated under the Director General of Railroads until the transportation act was passed in 1920. That act provided for the return of the railroads to their owners, and we had to make some disposition of the barges, towboats, and other water craft that were taken over during the war. Section 201 of the transportation act provided for the disposition of these various water craft, and that section is set out in the report in full. It directed that all of these facilities be turned over to the Secretary of War and that he should continue to operate them and carry out all the contracts that had been entered into during the war.

take to carry out the policy declared in section 500 of the transportation act.

Since 1924 these facilities have been operated by the Inland Waterways Corporation on business principles, and gradually the losses that had been theretofore sustained have been getting less and less, until finally the operations have resulted in a substantial profit to the Government, to say nothing of the very substantial savings in freight rates to the shippers of the country.

We have now reached the point where we have to do something more in order to properly carry out the provisions of the transportation act. In my time I want the Clerk of the House to read section 500 of the transportation act in order that the Members may have directly before them the purposes for which this corporation was organized, and also the main purpose for which this legislation is presented to the House. I ask the Clerk to read section 500 of the transportation act.

The CHAIRMAN. Without objection, the Clerk will read the section referred to.

There was no objection.

The Clerk read as follows:

SEC. 500. It is hereby declared to be the policy of Congress to promote, encourage, and develop water transportation service and facilities in connection with the commerce of the United States, and to foster and preserve in full vigor both rail and water transportation.

It shall be the duty of the Secretary of War, with the object of promoting, encouraging, and developing inland waterway transportation facilities in connection with the commerce of the United States to investigate the appropriate types of boats suitable for different classes of such waterways; to investigate the subject of water terminals, both for inland waterway traffic and for through traffic by water and rail, including the necessary docks, warehouses, apparatus, equipment, and appliances in connection therewith, and also railroad spurs and switches connecting with such terminals, with a view to devising the types most appropriate for different locations, and for the more expeditious and economical transfer or interchange of passengers or property between carriers by water and carriers by rail; to advise with communities, cities, and towns regarding the appropriate location of such terminals, and to cooperate with them in the preparation of plans for suitable terminal facilities; to investigate the existing status of water transportation upon the different inland waterways of the country, with a view to determining whether such waterways are being utilized to the extent of their capacity, and to what extent they are meeting the demands of traffic, and whether the water carriers utilizing such waterways are interchanging traffic with the railroads; and to investigate any other matter that may tend to promote and encourage inland water transportation. It shall also be the province and duty of the Secretary of War to compile, publish, and distribute, from time to time, such useful statistics, data, and information concerning transportation on inland waterways as he may deem to be of value to the commercial interests of the country.

The words "inland waterway" as used in this section shall be construed to include the Great Lakes.

Mr. ABERNETHY. Will the gentleman yield?
Mr. DENISON. I yield to the gentleman.

Mr. ABERNETHY. I desire to state to the gentleman that in view of the people who are favoring this bill, men like yourself and the gentleman from Illinois [Mr. WILLIAM E. HULL], the chairman of the committee, and others who have been con

not oppose it. I will support the bill, but I do want to call the attention of the gentleman and the committee to a bill that was passed sometime ago, which was introduced in the Senate by Senator Wadsworth and into the House by the gentleman from New York, Mr. Corning. This required the New York Barge Canal Co. to operate two barges from Baltimore to Morehead City and to Beaufort in consideration of the fact that the New York Barge Canal Co. had been relieved of $900,000. I have great respect for General Ashburn. I think he is a very fine officer, but I do not think that this agreement has been carried out, and following up the situation which is presented here, I want to call the attention of the gentleman to the fact that we have a great waterway system from Boston to Beaufort at present and it will soon run from Boston to Florida, with not a single or solitary piece of transportation on it. We had a Government-owned line operated by General Ashburn. It was allowed to be sold and the people who bought it were relieved of $900,000. I can not afford to take the position of a dog in the manger and I am not going to do it, but I want to call the attention of the gentleman and the members of the great committee on Interstate and Foreign Commerce to the fact that this agreement that was entered into with me has not been kept, as I view it; but I shall not oppose the proposed legislation in view of the fact that my friends here, who are the friends of waterways and have stood by me in the past, are for the bill, because I believe that when you start in with a set of good fellows on a great program you should stay with them, and for this reason I am going to support the bill.

Mr. DENISON. I appreciate very much the attitude of the gentleman from North Carolina, and I may say that I believe this proposed legislation will do more to bring about what the gentleman wants done than anything that can be done. Let me go ahead now briefly with a discussion of this matter.

Mr. McDUFFIE. May I interrupt the gentleman to say, with the gentleman's permission, that I do not want the impression left that the whole responsibility is left on General Ashburn, who is the executive head of this corporation. General Ashburn does not altogether fix the policy of this corporation. The Secretary of War and the board provided for by this Congress fix the policy with respect to the operation of the barge line. Mr. DENISON. Yes.

Gentlemen, we have more navigable waterways in this country than there is in any other country in the world. We have plenty of rivers that can take care of a great deal of the commerce of the United States when they are finally developed and when transportation gets back on them, and everyone knows who knows anything about transportation that the cheapest transportation in the world is transportation on the water. The cheapest transportation in the world to-day is the transportation on the Great Lakes of this country. Whenever we can get transportation on our inland waterways the people who are burdened with heavy freight charges will be relieved just to that extent.

I think it is the duty of Congress, it is our duty here, to not only improve these waterways as rapidly as we can, but it is our duty to carry out a policy that will bring transportation back on the rivers when we get them developed.

We have expended in the past the sum of $250,000,000, about, in improving the rivers of this country. Two hundred and fifty million dollars in improving the rivers! What for? Has this been merely an idle gesture? Has the money been lost? It will be lost unless we get commerce back on the rivers.

We have been carrying on this work of improving the rivers for years, and we are now reaching the period in our history where some of them are approaching completion and yet we find that commerce is not returning to them. Now, why is this? I am going to tell you why it is.

In the first place, the lower Mississippi, from Cairo to New Orleans, is about completed. The Monongahela River is completed, and the Warrior River, from Birmingham to Mobile, is completed with 17 locks and dams. The Ohio River will soon have been completed with 53 locks and dams. It will be a canal from Pittsburgh to Cairo, and when this is done the prediction is it will be covered with commerce in a few years. They are now working on the last two dams.

But we find that private capital is reluctant to go back into transportation facilities on the rivers. Why is this? I will tell you why it is. There are several reasons for it, and unless these difficulties are removed they will prevent private capital from investing in transportation facilities and will prevent the return of commerce to the rivers.

Now, what are the things that are preventing this? One is that we have not yet quite completed the channels sufficiently for safe transportation on the rivers; private capital will not invest in expensive facilities for transportation on the rivers until we complete the channels, so that commerce can

be transported with at least substantial regularity and safety. Why? When a barge or a load of barges gets hung up on a sand bar the expense is very heavy and private capital hesitates to go into such business until it is assured it will be reasonably free from such interferences.

Now, during the period when we have the rivers practically but not fully completed it has been thought wise for the Government to carry on this experiment in developing suitable types of barges and towboats for various rivers in order that we may pave the way and blaze the trail for private capital to invest in the industry. That is one reason.

Mr. MORTON D. HULL. Will the gentleman yield?
Mr. DENISON. Yes.

Mr. MORTON D. HULL. Will you ever get the channels clear so that you will have an uninterrupted traffic?

Mr. DENISON. Yes.

Mr. MORTON D. HULL. Are you not going to have new sand bars forming all the time?

Mr. DENISON. We will always have to carry on maintenance work, but we will soon have it so that there will be an ample channel to permit transportation to continue on the rivers with practical regularity.

But let me discuss the principal difficulty in inducing private capital to invest in water transportation. In the first place, we will never again have the old steamers that could run up to the shore anywhere and throw a rope around a tree and load or unload its freight. The railroads are carrying that kind of freight and will continue to do so. We will never have the packet steamers back on the rivers. We will have to develop and use the new form and type of towboats and barges. Now, we are developing suitable barges and towboats. One of these great barges will carry as much freight as a long train of freight cars will carry. When you couple them up into a fleet one towboat will carry on one trip as much freight as three or four hundred freight cars.

Commerce can be carried and is being carried by the Government at a profit at 4 mills per ton mile. The average rail rate is 11 mills per ton mile. When we get suitable types of barges and the channels improved so as to avoid occasional losses we could carry freight much cheaper than 4 mills per ton mile at a profit.

I started to tell you why private capital will not invest at the present time. The second reason is that when you use barges of this type you have to have suitable terminals; and it requires expensive terminals, terminals that cost $400,000 or $500,000. Mobile has spent a million dollars on its terminal on the Warrior River.

Mr. McDUFFIE. Mobile has just completed a $10,000,000 scheme of terminal, and the coal terminal cost about $450,000. Mr. DENISON. Dubuque, Iowa, has a terminal that cost $400,000 or $500,000; Minneapolis and St. Paul have similar ones costing about as much; St. Louis and East St. Louis have similar ones; while Memphis and New Orleans have larger terminals. The municipalities will not bond themselves and spend hundreds of thousands of dollars building these expensive terminals until they know there will be facilities on the river to carry the freight.

On the other hand private capital will not invest in towboats and barges until there is assurance that suitable terminals will be available. So we reach a condition of impasse where we can not get anywhere. The result is commerce can not return to the rivers, and the benefits of cheaper water transportation are postponed.

On account of that situation the Government is going on with this work. We are going ahead and furnish such transportation as we can with the facilities we have and with such additional facilities as Congress will provide, during the period while municipalities are constructing terminals and private capital is preparing to invest in water transportation, Mr. CROWTHER. Will the gentleman yield? Mr. DENISON. I will yield.

Mr. CROWTHER. The gentleman is making a very interesting statement in regard to getting private capital interested in this transportation. We have had the same experience in New York with reference to the Barge Canal that cost $300,000,000. We could not get the facilities for breaking bulk at New York and it is extremely difficult to get tonnage on the canal that really ought to be carried.

Mr. DENISON. Exactly. We declare a policy in this bill and say to the municipalities up and down the Mississippi River and certain of its tributaries and the Warrior River that we are going to continue the business of furnishing such transportation as we can and we ask them to cooperate by constructing suitable terminals; when the terminals are completed private capital, we think, will readily invest in transportation on the rivers.

We promise you that we will keep carrying on this business until you can build these terminals, after which time we will dispose of them to private capital.

Mr. LAGUARDIA. Is it the purpose of this bill, besides maintaining the ways and digging the channels, to operate the tow lines as a pioneer work and take the losses, but that as soon as traffic is sufficient to operate them at a profit to turn them over to private individuals?

Mr. DENISON. Not at all. That is not the purpose of it. Mr. LAGUARDIA. Is that the result?

Mr. DENISON. No. This bill does not have anything to do with improving the channels. That is a matter for the War Department.

Mr. LAGUARDIA. This is an operating company?
Mr. DENISON. Yes.

Mr. LAGUARDIA. Is it the intention to operate this company and to develop the trade up to the point where it can be operated at a profit and then turn it over to a private corporation?

Mr. DENISON. That is what we want to do if we can. As long as conditions exist so that private capital can not go into it and make anything out of it, private capital will not do so; it is not business; so there is an interim period when somebody has to carry on the work as a pioneer and demonstrate that it can be done in order to induce private capital to go into it, and if the Government can do that, then the money that the Government has spent will be well spent. With the few barges and the few boats which the Government has been operating on these rivers during the last year we have saved the shippers in freight rates $2,300,000. That represents the actual saving to the farmers and others who are using these limited facilities. Mr. LAGUARDIA. I concede this is a useful experiment, but some of us believe that when the Government does go into this transportation business, which is necessary as the argument shows, that it should continue in it.

Mr. DENISON. There are some who think the Government ought to stay in the business, but there is a difference of opinion about that. I am one of those who do not believe that the Government ought to stay in the business. I do not think the Government has any right in business, for the sake of business. I think the Government ought to carry on this work when private capital can not and will not go into it, in order to demonstrate that it can be done successfully and profitably to the shippers; and that then the Government ought to get out of the business. If we can remove these things that stand in the way of private investment, the Government can depend on private capital to come in and carry on the business.

Mr. MORTON D. HULL. Mr. Chairman, will the gentleman yield?

Mr. DENISON. Yes.

Mr. MORTON D. HULL. We authorized a subscription of $5,000,000 worth of stock several years ago, and now it is proposed to make it $15,000,000.

Mr. DENISON. Yes; this provides $10,000,000 more. Mr. MORTON D. HULL. For what purpose is the additional $10,000,000 to be used?

Mr. DENISON. This bill provides for $10,000,000 additional for the corporation and that money will be invested in additional towboats and barges. We are now holding ourselves out to provide this transportation and give the people the benefit of it, but the trouble is that the freight piles up on the docks and we have no facilities to take care of it. The farmers in Kansas City make sales of their wheat in Europe on the basis of its being delivered to the ships at New Orleans at barge-line rates.

It sometimes involves great amounts. When the time comes to ship the wheat, and they present it for shipment, we have not enough barges and towboats to take care of more than a small part of it, and the shippers, therefore, have to suffer the loss.

Mr. WAINWRIGHT. Mr. Chairman, as I understand it, this barge line is being operated to-day only on the Mississippi south of St. Louis and on the Warrior River.

Mr. DENISON. It is now operating from St. Louis to Minneapolis and St. Paul, as well as from St. Louis to New Orleans.

Mr. JENKINS. In view of the fact that the Ohio River is the most thoroughly improved river, what is the reason for excluding the Ohio River?

Mr. DENISON. For the reason that private capital is ready to invest in operations on the Ohio River, and additional private capital is getting ready to do so, and they do not want the Government to come there and operate in competition with them; and we do not want the Government to do it. Whenever we can get private capital to invest in facilities for the lower or upper Mississippi River the Government ought to withdraw from the service and let private interests take charge of it.

Mr. WRIGHT. This proposes to extend this service to any tributary or connected waterway of the Mississippi River. Mr. DENISON. Yes; under certain conditions.

Mr. WRIGHT. I understand. Why do you restrict it to the tributaries of the Mississippi alone? This is Government operation, and why restrict it to the tributaries of the Mississippi alone? Is not that discriminatory?

Mr. DENISON. No; it is not. The system has from the first been working on the Mississippi River, and some of the tributaries of the Mississippi are more nearly completed than are any of the other rivers of the country; for that reason and because the service can be extended to the tributaries of the Mississippi River in direct coordination with the mainriver line, the bill authorizes such extensions under the conditions mentioned. The conditions under which this service may be extended to its tributaries are laid down in this act. Mr. BRIGGS. Mr. Chairman, will the gentleman yield? Mr. DENISON. I yield.

Mr. BRIGGS. Reference is made to connecting waterways with the Mississippi River. Does that include the coastwise canal? If it connects with the Mississippi River it

Mr. DENISON. will be included. Mr. BRIGGS. Does it include that? Mr. DENISON. I am not familiar with the geography down there. I do not know whether it does or not.

Mr. BRIGGS. It is connected with the Mississippi River and runs on through.

Mr. DENISON. I can only say to the gentleman from Texas that if the canal connects with the Mississippi River it would be included in the provisions of the bill. Mr. MERRITT rose.

The CHAIRMAN. The gentleman from Connecticut is recognized for one hour.

Mr. MERRITT. I shall not use so much time as that.

Mr. Chairman, I am afraid that our side is not very numerous on this occasion. But I think that it is important that you gentlemen should understand what is proposed here. The gentleman from Illinois [Mr. DENISON] has explained the genesis of this corporation. It came by reason of the war, and I point out to you that it was only under war conditions that the Government undertook in the first place to run this barge line.

It has been the policy of this Government always, or practically always, to spend money for developing the harbors and waterways of this country. But when those harbors and rivers were made fit for navigation it was the uniform policy to have the operation of these waterways conducted by private capital and private enterprise, so that you should appreciate the fact that this corporation, which it is now proposed to expand, represents a new policy on the part of the Government.

General Ashburn testified that the property which was turned over to the Inland Waterways Corporation after it was unsuccessfully operated by the Secretary of War at a cost of about a million dollars a year represented an expenditure of about $13,000,000. Since that time the United States has invested $5,000,000 in the capital stock, and about $6,000,000 in other ways, making up deficits, and so forth. So that, according to General Ashburn's testimony, the capital account of this corporation to-day is about $24,000,000 or $25,000,000.

Now, I do not mention that by way of criticism of anybody, because the original equipment which was turned over to that corporation was bought at the very high prices of the war, and much of it was not suitable, and much of it had to be scrapped. I only point it out to complete the picture, to show you the investment that has been made up to date.

General Ashburn testifies that under the operation of this Inland Waterways Corporation, which began in 1924, making no allowance for interest on this $25,000,000, the operating accounts are about equal. There has been little profit or loss, but it is shown that there is no money now for increased equipment. He therefore proposes that the United States, in addition to this $26,000,000 which the corporation now represents, shall invest $10,000,000 more.