Hon. GEORGE A. DONDERO, House Office Building: LANSING, MICH., June 10, 1953. Following is copy of wire to Congressman Oakman and Machrowicz: "Michigan Farm Bureau strongly urges approval House Joint Resolution 104, sponsored by Congressman Dondero, providing for construction seaway as joint project with Canada. This may be last opportunity to join with Canada with voice in supervision seaway. Will appreciate your support of House Joint Resolution 104, also strongly supported by American Farm Bureau Federation. Hon. GEORGE A. DONDERO, C. L. BRODY, Executive Vice President. ITHACA, N. Y., June 11, 1953. Chairman, Committee on Public Works, House of Representatives: We wish to record our authority's approval of your bill, House Joint Resolution 104. The record will indicate that Governor Dewey has supported consistently the seaway project, and we consider that our attitude reflects not alone our official position, but also that of our State administration. Should anyone question or attempt to qualify this statement, I would appreciate your advice thereof and your permission to document the record. For more than 20 years, efforts were made in Congress to gain the United States-Canadian construction of both the seaway and the power project in the International Rapids section of the St. Lawrence River. It has always been contemplated that the power project on the New York side of the river would be turned over to New York State at cost. After years of failure to pass the seawaypower project legislation, New York applied to the Federal Power Commission in 1948 for a license to construct and operate the power project pending further delays on the seaway. It was the conviction of the New York administration that the separation of the deliberations as to power and seaway would lend ultimate success to both undertakings. That goal is within sight. The Federal Power Commission can quickly grant to New York State the license for the power project. New York is prepared to move forward immediately with those sorely needed projects. Canada has pledged construction of the seaway as a condition of the International Joint Commission approval of the power project already given. With both projects thus assured we are convinced that the United States should participate in the construction and operation of the seaway. We think that it would be unfortunate for the United States to be blocked from participation in the management of this strategic waterway. JOHN E. BURTON, Chairman, Power Authority of the State of New York. Hon. GEORGE A. DONDERO, THE COMMONWEALTH OF OHIO, State House, Columbus, June 11, 1953. Chairman, House Public Works Committee, House of Representatives, Washington, D. C. DEAR MR. DONDERO: The members of House Public Works Committee are now hearing testimony in support of House Joint Resolution 104. I understand that House Joint Resolution 104 is a companion measure to the Wiley bill, S. 589. For the purposes of the record of the testimony submitted in behalf of House Joint Resolution 104, I am herewith offering as my evidence a copy of my letter submitted to the Senate Foreign Relations Committee in support of S. 589. My views about the need of building the St. Lawrence seaway are growing constantly stronger. I wish that could appear before your committee and testify in person, but the responsibilities of my office and the heavy volume of work confronting me, makes it impossible. Sincerely yours, FRANK J. LAUSCHE. STATE OF OHIO, Hon. ALEXANDER WILEY, Chairman, Senate Foreign Relations Subcommittee, United States Senate, Washington, D. C. DEAR SENATOR WILEY: My name is Frank J. Lausche. I am filing this statement with the Foreign Relations Subcommittee of the United States Senate in my official capacity as chief executive of the State of Ohio to urge this committee, as well as the Congress of the United States, on behalf of the State of Ohio, to act favorably on S. 589, the Wiley bill, to authorize joint participation with Canada in the construction of the St. Lawrence seaway, as provided in the bill. It is not possible for me to make a personal appearance in support of this legislation before your committee as the 100th General Assembly of the Ohio State Legislature is now in session. Just a little over 7 years ago, March 4, 1946, I appeared in person before this committee, in this same official capacity, to support Senate Joint Resolution 104, likewise a bill to authorize the construction of the St. Lawrence Waterway jointly with Canada. The basic thought behind my testimony at that time can best be summarized from one of the concluding paragraphs of my statement, viz: 66* * * wherever in the Nation there lies available a natural geographical condition that with the help of a man's hand can be converted into a tremendous wealth-producing agency it ought to be done. For the moment those who are remotely disconnected with it by space will complain. Eventually, however, they will benefit." This statement was made in the first of the postwar years; our country was in the throes of demobilization following the end of World War II and we were looking forward confidently to a period of peace and tranquillity in the world. It is needless to remind the members of this committee how futile that hope was, how bitter our disappointment, and how the course of events have made it vital and urgent that we again gird ourselves and be prepared to defend our institutions of freedom. In the light of world conditions today the St. Lawrence seaway is not only needed, it is my considered opinion that it is essential to the national welfare and national security of our country. Qualified leaders in our Government have stated that it is altogether probable that this country will have to maintain a state of preparedness for the next 10 to 15 years, perhaps for the next generation. The base of any preparedness or defense program in the modern world is steel. That country which can produce steel cheaply and in abundance is the country best prepared to defend itself and maintain its place in the community of nations. This ability on the part of the United States, plus the genius of our people for mass production, are two of the prime reasons for our position of leadership today among the nations of the free world. Anything, therefore, that would impair or curtail our ability to produce steel in this country vitally affects the security of our Nation. It is not necessary for me to bring to the attention of this committee the threat to the stability of the steel industry of the Middle West in the dwindling reserves of high-grade, direct-shipping ores in the Mesabi Range. Many pages of testimony, by far more competent witnesses than I, have already produced irrevocable proof of this fact. That this situation is significant to the economy of the State of Ohio becomes readily apparent when you consider that in 1951, out of a total of 105 million tons of steel production in the United States, almost 21 million tons, or over 20 percent, was produced in the State of Ohio. To meet the constantly increasing demands for steel and to offset the declining reserves in Minnesota it will be necessary to develop new sources of iron ore. The logical source for the steel industry of the Middle West to secure its supplemental supply is from the deposits now under development up in Labrador. It so happens that these tremendous reserves are but 76 miles farther by water from the furnaces of the Midwest steel mills than ore from the Mesabi. Construction of the St. Lawrence seaway is necessary if Labrador ore is to move in quantity to the steel mills of the Middle West. This waterway, with a 27-foot channel, will make it possible for the new, large, modern ore carriers to transport this 'vital raw material from which steel is made direct from Seven Islands on the lower St. Lawrence River to the lower lake ports, over the same type of low-cost water route as is now available to Mesabi ore. According to the report of the President's Materials Policy Committee, issued in June 1952, it is estimated that the volume of ore to be imported from other countries will approach 65 million tons a year by 1975. Furthermore the transportation savings on such a volume as this would be tremendous when it is realized that today it costs $1.48 to transport a ton of iron ore from Cleveland to Youngstown by rail, a distance of 71 miles, whereas this same ton of ore is transported from Duluth to Cleveland by water, a distance of 835 miles, for $1.45. From the foregoing it is easy to see that construction of the St. Lawrence seaway is desirable not only from the standpoint of assuring a continued supply of raw material to a vital defense industry but it will also yield a fiscal saving in transportation rates which will redound to the benefit of the United States taxpayer, who is footing the bill for the defense program. In addition, there is one other feature in connection with the present legislation, which makes it highly desirable at this time. That is the proposal to make the project self-sustaining and self-liquidating by charging tolls for the use of the navigation facilities. This is a feature of the present bill that was not even being considered at the time of my previous testimony, some 7 years ago. me, this self-liquidating feature which eliminates any burden on the taxpayer to construct the project, plus the necessity for the development at this time in the interest of the national security, makes the argument for the project conclusive. Το Canada is ready and waiting to take on this whole development alone, yet Canada has a population of something like one-eleventh of that of the United States. Canada has soundly appraised the value and importance of the project. They know that if they build this project alone, by themselves, they will not only own it but control it while the United States economy will repay them their investment in the tolls charged into the cost of the products bound for, or shipped from the United States economy. All of the foregoing are logical, powerful, and convincing arguments but, in the final analysis, they are largely academic, and beside the point, with the situation as it exists today. Construction of this project is inevitable. Despite all the efforts to block approval in Congress, despite all the claims of the opponents of the harm that will be done to them, they are going to be faced with these feared disadvantages or unfavorable effect to their interests anyway. Canada-not the United States-has determined that. What this country has to determine what the opponents of the project around the country should give some serious thought to-is whether or not it is in the national interest that our country should participate in the construction of the project with Canada and thus have a voice in its control. That is the only decision to be made and that is the decision covered by the provisions of S. 589-the Wiley bill. It is my firm belief that this great country of ours cannot afford to let a foreign country, no matter how close or friendly, to completely own and have absolute control over a strategic waterway that leads straight to the agricultural and industrial heart of our Nation. The evidence is overwhelming that we should join with Canada in this project, and as a part owner have a voice in its control. Therefore, I urge favorable action on the part of this great committee, as well as by both Houses of the Congress of the United States. Thank you. Sincerely yours, FRANK J. LAUSCHE. Mr. DONDERO. The Chair wishes to make a statement. Yesterday we used more time than we were conscious of and in discussing it among the members of the committee who are opposed to the seaway and the other members for it, the opposition has very fairly and very generously suggested that the additional time which we used yesterday afternoon not be counted and we begin this morning a fresh day of 2 hours. The committee intends to run until noon today and then adjourn over until Monday. Mr. McGREGOR. I want to concur in the statement made by the chairman. Approximately 4 hours and 15 to 20 minutes were consumed yesterday. We recognize that questions were asked which did impair the time allotted under an agreement of 6 hours for opponents and 6 hours for the proponents. We have agreed to the suggestion that we start this morning as the schedule was arranged for us to start and consider yesterday afternoon as extra time for the proponents. If the opponents have to use it we can, but we do not want to unless it is absolutely necessary. Mr. DONDERO. Thank you very much. The first witness this morning is Mr. Harry C. Brockell, who is the director of the port of Milwaukee, Wis., and I think holds some official position on the Great Lakes Harbor Association. Am I right, Mr. Brockell? STATEMENT OF HARRY C. BROCKELL, DIRECTOR, PORT OF MILWAUKEE, WIS. Mr. BROCKELL. I am secretary of that association. Mr. DONDERO. Mr. Brockell, we will be pleased to hear you. Mr. Chairman and gentlemen, I appear before your honorable committee as chairman of the Governor's Committee for the St. Lawrence seaway project, State of Wisconsin, and as vice chairman of the Wisconsin Deep Waterways Commission, an official State commission. I desire to enter the appearance of both bodies in support of the legislation before you. I appear also as secretary of the Great Lakes Harbors Association, a municipal association, and on behalf of the Board of Harbor Commissioners of the City of Milwaukee, by whom I am employed as municipal port director. These bodies also desire to record their support of this legislation. The four groups on whose behalf I appear are completely convinced of the merit of the legislation before you. We believe that House Joint Resolution 104 has four important advantages, when compared with seaway legislation previously considered by the Congress: (1) It would assert American determination to have a voice in the development of the St. Lawrence project; (2) It pinpoints our responsibilities to the International Rapids section, leaving to Canada the development of the works entirely within Canadian waters; (3) It should eliminate controversy which has previously prevailed with respect to the power phase of the project; and (4) It so substantially reduces the Federal financial commitment that it should be acceptable to most Members of the Congress who are properly concerned with budgetary economy. Our detailed comment on the several principal aspects of this legis lation is as follows: I. DESIRABILITY In view of the fact that Canada is ready to proceed immediately with an all-Canadian seaway, we regard it as not only desirable, but extremely necessary from the standpoint of national security and other considerations, for the United States to construct part of the St. Lawrence canals within American territory and to exercise joint control with Canada. We cannot conceive that the Congress will permit our equity in the St. Lawrence development to go by default to a friendly but foreign nation. We believe that the Nation would have cause to regret the international repercussions, not only in Canada but throughout the world, if we turn our back on the opportunity to develop the St. Lawrence in collaboration with Canada. A negative decision on this important question may offer to the world a demonstration of inability to agree on a great national resource development in harmony with a good neighbor and ally, at the same time that we are endeavoring to export American democracy to the rest of the world at staggering cost. It would be not only bad diplomacy, but bad business judgment, not to join in the St. Lawrence development, as American shipping will inevitably provide most of the tolls which will make the project self-liquidating on either side of the international boundary. The question is whether we shall be a partner with the Dominion of Čanada in a meritorious self-liquidating project or, by failing to act, shall become merely a paying customer to support the enterprise. II. CORPORATION We believe that the financial structure and methods proposed in House Joint Resolution 104 are sound and meritorious, and are realistic in the light of the Federal budgetary situation. The immediate obligation of the Federal Treasury is reduced to the token sum of $2 million, as compared to past legislation, which involved appropriations in excess of $500 million. Mr. DONDERO. I think you meant $200 million instead of $2 million. Mr. BROCKELL. I was referring to the working capital provided in the bill, Mr. Chairman, with the understanding that the rest of the obligation will be on a self-liquidating basis. Mr. DEMPSEY. May I ask a question? Mr. DONDERO. Yes. Mr. DEMPSEY. Are you going to build something that is self-liquidating as you build it?" Mr. BROCKELL. I beg your pardon? Mr. DEMPSEY. You say for $2 million we are going to get something that costs several hundred millions of dollars and we would get the job done as the previous bills provide it. How are you going to liquidate something as you build it? Mr. BROCKELL. It cannot be liquidated until it is put in operation. Mr. DEMPSEY. How much money is it going to cost to put it into operation? Mr. BROCKELL. As I understand the estimate submitted by the Corps of Engineers is about $100 million. Mr. DEMPSEY. So that it costs that much to build it? Mr. BROCKELL. Yes, sir. Mr. DEMPSEY. From where do you get this self-liquidation feature? Mr. BROCKELL. On the proposition that the tolls will be collected which will make the canals self-amortizing over an approximately 50-year period. Mr. DEMPSEY. The best information we have today is if-if we can get a certain amount of tonnage, and if the tolls can be fixed at a rate that would amortize it, yes. But there is nothing here before this committee to prove the statement you just made that it was selfliquidating. It is only an estimate. Mr. BROCKELL. As the hearing develops I think you will be satisfied that a very substantial block of tonnage is in prospect for this canal. |