« PreviousContinue »
at such times as may be determined by the I have previously pointed out to the Sen- the senior Senator from New Jersey (Mr. President. This proposed legislation, in ad- ate that a strong and effective Walsh-Healey
SMITH), I introduce for appropriate refdition, is só phrased that the President may Act was an important step in the achieve
erence a bill to amend the Trading With use the authority to transfer the equip- ment of a strong national economy without
the Enemy Act, as amended, and for ment as a part of any overall financial set- undesirable industry dislocation. The purtlement that may be proposed in the future pose of this amendment is to clarify the
other purposes. between the country concerned and the definition of certain key terms used in the The Committee on the Judiciary held United States.
act in order to bolster the present, and I rather extended hearings on the whole The Security Treaty between the United believe proper, administrative interpretation question of alien property, and as a reStates and Japan, under which United of those terms. Secondly, this bill attempts sult of those hearings there has been States forces are maintained in Japan, con- to meet one of the most frequent complaints
contrived what might be called a packtemplates the increased assumption by Japan about the Walsh-Healey Act; namely, the lag
age bill which reflects the results of a of responsibility for its own defense. Jap- between wage levels and administrative findanese security forces have been using equip- ings. Under this bill, the Secretary of Labor
great variety of bills introduced by ment loaned by the United States for train- is called upon to make such redetermina
Members of the Senate. ing purposes. The object of the proposed tions from time to time as are necessary to The VICE PRESIDENT. The bill will legislation is to permit the transfer of equip- reflect with reasonable accuracy prevailing be received and appropriately referred. ment to the Japanese Government, in ac- minimum wages, and the procedures for pe- The bill (S. 2477) to amend the Tradcordance with mutually acceptable arrange- riodical reviews of existing wage determina
ing With the Enemy Act, as amended, ments which may be worked out between the tions are spelled out.
and for other purposes, introduced by two Governments.
Business and labor groups in New Eng
Mr. DIRKSEN (for himself and other Under the words "procured prior to July land-including the New England Council's 1, 1953,” in the proposal, it is intended that annual tabulation of business leaders and Senators), was received, read twice by any military equipment and supplies cur- the report of the New England Governors'
its title and referred to the Committee rently in the possession of the Department committee on the textile industry—as well on the Judiciary. of Defense which were purchased with ap- as other organizations and individuals in all propriated funds prior to July 1, 1953, could parts of the country have recognized the be transferred, and any military equipment need for improving the Walsh-Healey Act.
HOUSE BILL REFERRED and supplies not yet delivered but which This act is an important foundation of our were contracted for prior to July 1, 1953, and labor-standards legislation, necessary to pro
The bill (H. R. 4017) to provide for for which funds were obligated prior to tect fair-minded employers in all parts of the conveyance of certain land and imJuly 1, 1953, could also be transferred. the country from depressed wage competi- provements to the England Special Because this proposal involves military
School District of the State of Arkansas, programs and plans, it is requested that the
was read twice by its title, and referred Department of Defense be permitted to pre
USE OF AGRICULTURAL COMMOD- to the Committee on Agriculture and sent the justification of this legislation by testimony to be given before the appropriate
ITIES TO IMPROVE THE FOREIGN Forestry. committees of the Congress in executive ses- RELATIONS OF THE UNITED sion.
CONSIDERATION OF NOMINATION COST AND BUDGET DATA This transfer will not include any grants
Mr. SCHOEPPEL. Mr. President, on OF ROBERT D. COE, TO BE AMBASof money but of assets already procured.
behalf of myself, the Senator from New SADOR TO DENMARK DEPARTMENT OF DEFENSE ACTION AGENCY Mexico [Mr. ANDERSON), the Senator
Mr. WILEY. Mr. President, the White from Kentucky [Mr. CLEMENTS), the The Department of the Army has been
House sent to the Senate today the designated as the representative of the DeSenator from Mississippi (Mr. EASTLAND),
nomination of Robert D. Coe, of Wyopartment of Defense for this legislation. the Senator from North Carolna [Mr.
ming, to be Ambassador of the United Sincerely yours, HOEY], the Senator from South Caro
States to Denmark. I give notice that JOHN G. ADAMS, lina [Mr. JOHNSTON), the Senator from
the nomination will be considered by the Acting General Counsel. South Dakota [Mr. MUNDT), the Sena
Committee on Foreign Relations, after tor from Vermont (Mr. AIKEN], the Sen
6 days have expired, in accordance with ator from Minnesota [Mr. THYE), the
the committee rule. CLARIFYING AMENDMENTS TO
Senator from Idaho [Mr. WELKER), and WALSH-HEALEY PUBLIC CON- the Senator from North Dakota [Mr. TRACTS ACT
YOUNG], I introduce for appropriate ref- ADDRESSES, EDITORIALS, ARTICLES, Mr. KENNEDY. Mr. President, I inerence, a bill to authorize the President
ETC., PRINTED IN THE APPENDIX troduce for appropriate reference a bill
to use agricultural commodities to imto amend the act of June 30, 1936—the
prove the foreign relations of the United On request, and by unanimous conStates and for other purposes.
sent, addresses, editorials, articles, etc., Walsh-Healey Act. I ask unanimous consent that a statement by me relating be received and appropriately referred.
The VICE PRESIDENT. : The bill will were ordered to be printed in the Ap
pendix, as follows: to the bill be printed in the RECORD. The VICE PRESIDENT. The bill will President to use agricultural commodThe bill (S. 2475) to authorize the
By Mr. JOHNSON of Texas:
Article discussing the effects of the Texas be received and appropriately referred; ities to improve the foreign relations of
drought, written by Charles Lucey, and puband, without objection, the statement the United States and for other pur
lished in the Fort Worth (Tex.) Press of will be printed in the RECORD.
July 20, 1953. The bill (S. 2471) to amend the act of poses, introduced by Mr. SCHOEPPEL (for
By Mr. CLEMENTS: himself and other Senators), was reJune 30, 1936—the Walsh-Healey Act
Article by Barry Bingham, published in introduced by Mr. KENNEDY, was received, read twice by its title, and re- the Louisville (Ky.)
(Ky.) Courier-Journal of ceived, read twice by its title, and re
ferred to the Committee on Agricuiture April 26, 1953, reporting on conditions in and Forestry.
Vietnam. ferred to the Committee on Labor and
Article by Barry Bingham published in the
Subsequently, Public Welfare.
Louisville (Ky.) Courier-Journal of June 7, The statement by Senator KENNEDY is
Mr. SCHOEPPEL, from the Commit
1953, in the form of a report on Pakistan. as follows: tee on Agriculture and Forestry, to
By Mr. WILEY: which was referred the bill (S. 2475) to STATEMENT BY SENATOR KENNEDY
Editorial from New York Times of July 24, authorize the President to use agricul- 1953, and resolution of the Wisconsin Pipe I have today introduced a bill providing tural commodities to improve the for- Trade Association regarding the Bricker for several clarifying amendments to the eign relations of the United States, and
amendment. Walsh-Healey Public Contracts Act. The Senator from Maine [Mr. PAYNE) and
Editorial entitled “Why This ‘Bricker' for other purposes, reported it favorthe Senator from Rhode Island (Mr. GREEN) ably, without amendment, and sub
Frenzy?” published in the Milwaukee Jourhave also introduced legislation which I have
nal, and statement prepared by Senator mitted a report (No. 642) thereon.
WILEY entitled "The Fallacies of the Judisupported to expedite proceedings under
ciary Committee's Majority Views on the this act, and it is my understanding that
Bricker Amendment." consideration is to be given this legislation AMENDMENT OF TRADING WITH
By Mr. DIRKSEN: at an early date by the Senate Committee THE ENEMY ACT, AS AMENDED Editorial entitled “Taking Them as They on Labor and Public Welfare. The purpose of my bill is to supplement their bills and
Mr. DIRKSEN. Mr. President, on be
Are," published in the Christian Science
Monitor on July 16, 1953, with reference to to give to the committee an opportunity to half of myself, the junior Senator from
a report from a study group in France criticonsider the various changes needed to ex- New Jersey (Mr. HENDRICKSON), , the cizing the French fiscal system and recompedite Waish-Healey proceedings.
Senator from New York [Mr. Ives), and mending severe curtailment of economic aid. By Mr. POTTER:
and enhancing his white brothers' finest way accrued interest. The agreement also reArticle entitled "New Orleans: Clean Port, of life.
stricts the payment of dividends until the Lower costs," from the New Orleans Port The Choctaws exalted him as one of their entire purchase price of $9 million, plus acRecord.
noblest chiefs—white men approved and wel- crued interest, has been paid. An editorial headed “Merchant Shipping," comed his leadership with highest respect.
DESCRIPTION OF BARGE LINES published in the El Paso (Tex.) Times.
Now he is gone. No more will we see his By Mr. KERR: face, or hear his voice around the council
Before I discuss further details of the sale Editorial entitled "Social Security Law fires. His feet have sped across the wide
and the interesting history of the transporFull of Holes,” published in the North Star, river, over the great prairies. His soul has
tation experiment, I should like to describe of Oklahoma City, Okla. soared beyond the purple mountains.
the Federal barge system, which in recent By Mr. BUTLER of Maryland:
A chief he lived, a chief he died. A chief years often has been called a "white ele. Article entitled “How To Grab 20 Acres for he will ever be to inspire in us a greater
phant." $1.25," relating to Federal lands subject to faith—a finer courage-a nobler aim.
The Inland Waterways Corporation was mining laws, published in a recent edition Strive as we will, we cannot hope to do
created by Congress in 1924. It operates a of the Reader's Digest. more.
common carrier transportation service on the Editorial entitled "Downward Trend in a
Mississippi, Illinois, Missouri, and Warrior Mighty Fleet," published in the Baltimore
Rivers, with 20 towboats, 4 tugs, and 253 SALE OF INLAND WATERWAYS Sun of July 24, 1953, discussing the American
barges on 3,300 miles of inland rivers. merchant marine. CORPORATION TO THE FEDERAL
PURPOSE IN CREATION OF SYSTEM Article entitled "Equal Rights Fight Is WATERWAYS CORP. OF DELAOn," published in the New York Times of WARE
The purposes of the Corporation's creation
were: July 19, 1953, relative to the proposed equal
Mr. CAPEHART. Mr. President, I (a) To develop common carrier barge rights amendment to the Constitution; and letter addressed to him by Hazel Palmer, ask unanimous consent to have printed transportation,
(b) To exploit the possibilities of water under date of July 17, 1953, on the subject in the body of the RECORD a statement of equal rights for men and women, which which I have prepared in connection
(c) To make available the benefits of rewill appear hereafter in the Appendix. with the sale of the Commerce DepartArticle entitled "State Prepares To Lift ment's Inland Waterways Corporation
sulting economies to the widest possible Peace Cross Roads; AAA Demands Action'';
number of shippers, both large and small, at to a private company, together with a and editorial entitled “Where Droughts Are
river ports as well as in the hinterland. press release issued by Secretary Weeks, The laudable original purposes long since Welcome,” published in the Washington
and a copy of a letter which he sent to have been served. In recent years the losses Evening Star of July 23, 1953. each Member of Congress.
incurred by Government operation have been By Mr. SPARKMAN: Article entitled, “Can Boswell Win His
a drain on the taxpayers.
There being no objection, the matters Sixth Title," written by Ali Van Hoose and were ordered to be printed in the RECORD, WIDE DIFFERENCES OF OPINION ON LINES published in the magazine section of the as follows:
Although recent administrations, on ocBirmingham News of last Sunday.
STATEMENT BY SENATOR CAPEHART
casion, have professed that they were willing Article entitled, “Hi Neighbor," written by
to sell the Corporation, they never have suc-, Steele McGrew, dealing with the TVA.
Secretary of Commerce Sinclair Weeks, with
ceeded in getting a customer to sign on the Letter written by Mr. C. D. Boartfield, of the approval of President Eisenhower, has re
dotted line. moved the Federal Government from direct Huntsville, Ala., on the subject of the Ten
Federal ownership of the barge system has competition with private barge lines by sellnessee Valley Authority.
caused wide differences of opinion. ing the Commerce Department's Inland By Mr. KEFAUVER: Waterways Corporation to
Advocates of planned economy and State Editorial entitled, “The Bricker Amend
control have clung to the idea. They have Waterways Corp of Delaware, à private comment Again," published in the New York
repeatedly sought large public expenditures Herald Tribune of July 7, 1953. pany.
to rehabilitate equipment and to expand
The Secretary's action is concrete evidence A statement prepared by him on the 20that the Eisenhower administration is keep
operations. But the Congress in the last percent excise tax on moving-picture admis
two sessions has refused to dump any more sions. ing its pledge to remove Uncle Sam from
of public funds into the venture.
Other groups, also, in the past have fay
ored operations. Back in 1917 the original THE CHIEF GOES WEST-DEATH OF
FINANCIAL TERMS OF SALE
champions turned to the idea as a means of BEN DWIGHT
The sale is a good business transaction for more effectively utilizing our domestic waMr. KERR. Mr. President, I wish to
the public from any way one looks at it. terways. Later in World War I, railroad con.
Secretary Weeks has taken the Govern- gestion of military freight caused the Govpay tribute to the memory of one of
ment-owned barge line, on which from 1939 ernment to enter the barge business for Oklahoma's finest sons. For many years
through 1952 the taxpayers have lost $9,749,- relief. Ben Dwight was one of my most trusted
000 in 12 of the 14 years, and not only gets CONDITIONS HAVE CHANGED SINCE CREATION and devoted friends. He passed away a a sales price of $9 million but, in addition, he
But these earlier reasons have lost their few nights ago. He will long be missed has arranged for the United States Govern
force. In the initial period there was scarceby thousands of Oklahomans who knew ment to retain quick assets of the Corporation, which, after deduction of current lia
ly any private barge service on the inland and cherished and trusted him.
waters. Channels had not been dredged. I have expressed my sense of deep loss bilities, should net approximately $2,700,000
River terminals were few. Equipment had in cash and accounts receivable. and regret in a brief statement which I
not been developed to meet the requirements
Taxpayers no longer will be making up ask to have printed in the RECORD as a
of modern barge transportation. losses. Instead, the private corporation will part of my remarks.
Today there are several thousand miles of pay taxes.
improved waterways. Modern types of floatThere being no objection, the state- The sale is a good thing for the users of
ing equipment are at hand. Approximately ment was ordered to be printed in the the system, especially those shipping less
100 private barge lines are in operation. RECORD, as follows:
than bargeload freight. The contract pro-
SMALL SHIPPERS FULLY PROTECTED
furnish cargo service similar to the current Small shippers need not fear the current Down the long trail of his fathers, out of arrangement.
transfer to private industry. For their prothe midnight of death into the light of an The purchaser will take over the current tection Secretary Weeks had safeguards writeternal dawn, his gallant spirit moves aloft. labor contracts.
ten into the contract which provide for a He had known for many moons that he So the administration at a stroke has car- continuance of common-carrier service "in must go, but he was unafraid. He spent his ried out constructive action that is good a manner substantially similar" to the serytime making plans for others with an abid- for the public, good for the customers and ice which the Inland Waterway Corporation ing faith that the great chief of all would good for the workers.
has been providing since its inception. care for him.
The Federal Waterways Corp. of Delaware Common-carrier service is defined and : He trusted the white man's God, knowing is a new and wholly owned subsidiary of the provided for in the contract briefly as folhe could do so without forsaking his own. St. Louis Shipbuilding & Steel Co., of which lows:
He never appeased an enemy, or failed a Herman T. Pott, of St. Louis, is the presi- 1. Adequate provision for transporting friend-yet he did not hate the one, nor dent. Mr. Pott is chairman of the board such less-than-bargeload and less-than-carimpose upon the other. of the Federal Waterways Corp.
load shipments as can reasonably be anticiBen Dwight was a blessing to all-a bur- The sale calls for the purchaser to put in pated, and the active solicitation of such den to none. As he remembered and cher- $1 million in new working capital and in shipments. ished the virtues of his friends, so shall addition to pay the purchase price of $9 2. The maintenance as authorized by law his virtues never be forgotten by so many million over a period of 10 years, plus in- of such joint tariffs with rail carriers as who knew and loved him.
terest at the rate of 334 percent annually. shall make generally available the privileges He honored the highest precepts and tradi- The agreement provides that the purchaser of joint rail and water transportation upon tions of his Indian forebears while adopting may prepay any or all installments and terms reasonable and fair joint tariffs with motor carriers whenever feasible in the pro- contract. A default in common-carrier serv- industry. Today's action is proof that we motion of transportation service.
ice on 30 percent of the required trips in any have kept our promise." 3. Alertness to make reasonable arrange- one year on which common-carrier service is
HISTORY OF FEDERAL BARGE LINES ments for interline traffic with other trans- to be provided will, if not excused, also conportation services. stitute a total default.
The significance of this major accomplish4. The maintenance of transportation Under the terms of the agreements, 14 per
ment is better appreciated if we recall in service in specified districts and divisions cent of the total tonnage each year, or 375,000
more detail the salient points in the history
of this Government experiment in operating and the making of specified minimum trips tons, whichever is lower, must comprise less as follows: than barge-load traffic. Default on this re
The Inland Waterways Corporation-as (a) From the port of New Orleans, La., quirement will mean the payment of damto the port of St. Louis, Mo., and return ages to Inland Waterways Corporation of $2
I sketched briefly earlier—was the out(designated as the lower district), 125 trips per ton of deficiency. A deficiency of more growth of a study undertaken by the Council per annum in each direction. than 150,000 tons will be deemed a total de
of National Defense in June 1917, looking (b) From the port of St. Louis, Mo., to the fault.
to the more effective utilization of domestic In the event of breach of contract the
waterways. The Federal Control Act of ports of St. Paul and Minneapolis, Minn.,
Government has recourse to the courts to enand including Stillwater, Minn., on the St.
March 21, 1918, authorized the acquisition Croix River and Port Cargill and Black Dog, force performance or to recover damages, or of boats, barges, and other transportation
facilities on inland canal and coastwise Minn., on the Minnesota River, and return by written notice to terminate the agreement
waterways. (designated as the Upper District), 40 trips and repossess the facilities sold, possess new per annum in each direction. facilities acquired, and demand the surrendex The Director General of Railroads there
upon commandeered all privately owned (c) From the port of St. Louis, Mo., to the of any retained net earnings. port of Chicago, Ill., and return (designated
floating equipment on the New York State
OPPOSITION TO GOVERNMENT OWNERSHIP as the Illinois District), 75 trips per annum
Barge Canal and on the Mississippi and
Opposition to Federal ownership and oper- Warrior Rivers. He simultaneously set up in each direction. ation has increased over the years. Private
a field organization for the conduct of those (d) From the port of St. Louis, Mo., to the transportation companies have strenuously
respective activities. port of Omaha, Nebr., and return (designated objected to competition from a Federal
The Wilson administration declared that as the Missouri District), 16 trips per annum corporation that paid no taxes.
the unprecedented wartime demands for in each direction.
In recent years there has developed in
transportation to supply our troops over(e) From the port of New Orleans, La., to creasing public opinion against all sorts of seas had caused such a congestion on the Port Birmingham, Ala., and return (desig- Government ownership. Antipathy for big railroads that it had become necessary to nated as the Warrior River Division), 18 government has been reflected in both the turn to inland waterways for relief. trips per annum in each direction. Republican and Democratic Parties. Dur
The Railroad Administration began op(f) From Port Birmingham, Ala, to the ing the election campaign, Republicans re
erations on the lower Mississippi with the city of Ensley, Ala, and return (designated peatedly promised to do everything possible
first sailing from St. Louis on September as the Railroad Division), such trips as may to remove Uncle Sam from competition with
28, 1918. The hastily acquired fleet conbe necessary to transport cargoes in reason- private business—a competition which was
sisted of 5 towboats and 29 barges. Service able quantities delivered at or destined to curtailing private investment opportunities
on the Warrior River was begun in DecemPort Birmingham, Ala., and such on-line and destroying private jobs.
ber 1918, with 1 towboat and 2 self-procargo in reasonable quantities as may be
pelled barges and 10 coal barges. offered for transportation. (g) In the event transportation to Sioux
The case against the Federal barge lines ACTION BY REPUBLICAN ADMINISTRATIONS City, Iowa, becomes practical and feasible, was very strong among economy-minded
The operations comriended by the Railthe purchaser will extend service to this area
people, who pointed out that in most years road Administration were continued to Febto provide such services as are justified in since the Corporation's start it had operated
ruary 29, 1920, when the Harding administhe light of demand therefor and cargo in the red
tration transferred the Government-owned available.
From 1939 through 1952, the system piled facilities to the Secretary of War for operaThe contract further provides that at in
up losses totaling $9,749,000, losing money tion under the terms of the Transportation
in 12 of the 14 years. termediate ports and landings, calls will be
-Act of 1920. made and barges spotted whenever a rea
SECRETARY WEEKS PROMISES ACTION
The facilities acquired by the Railroad Adsonable quantity of cargo is offered for trans- Shortly after he became Secretary of Com
ministration, as a wartime measure, were portation.
merce, Mr. Weeks, in a public statement on continued in operation under mandate of Let me repeat, small shippers and those February 8, 1953, announced that he would Congress by the Secretary of War as a nawho enjoyed the benefits of small shipments try to sell the Inland Waterways Corporation.
tional defense measure and as an experiment will receive the same type of service they He declared: "Operation of the Federal Barge until June 3, 1924. Then, in the Coolidge have had in the past. And in addition they Lines is the type of Federal activity which
administration, the facilities were transwill get all the advantages of progressive, effi- could be better performed by private enter
ferred to the Inland Waterways Corporation, cient, private management. prise. This is an instance in which Govern
created by an act of Congress. SECURITY FOR PERFORMANCE OF SERVICE ment should get out of business, with re
It is interesting to note that the Secretary
of War, who transferred the barge system to As security for the performance of the pur
sultant savings to the taxpayer."
the Inland Waterways Corporation, was the chaser's obligation with respect to service, the contract provides that until such time Unlike some of his predecessors, he really late John W. Weeks, father of Sinclair Weeks, as the entire purchase price, plus accrued intried to sell the properties. He succeeded
the Secretary of Commerce, who has written terest has been paid, that the purchaser shall where all others refused or failed. And he
the final chapter to the story of that Govmade a good bargain for the Government. utilize funds provided by depreciation and/or
ernment Corporation. amortization, excess self-insurance reserves, In announcing the sale, Secretary Weeks
EARLY CORPORATION OPERATIONS and net income after taxes from operations in a public statement declared:
In creating the Corporation, the Republifor the following purposes in order of prior- for the taxpayers. It not only will add a
“The sale is a good business transaction
can Congress, mindful of the fact that operity:
'ations in the Wilson administration had been 1. To maintain necessary working capital.
substantial sum to the United States Treas- conducted at a loss of over a million dollars á 2. To meet payments and interest, if any. ury but it also will place the property where year, enunciated the policy that the Corporaunder the purchase contract.
for the first time it will yield annual tax tion should enjoy the same rights and privi3. To repay loans, or to rehabilitate exist- revenues to the Government.
leges as a privately owned transportaion ing facilities or to acquire other facilities, “The sale is a good thing for the users company. until the facilities have been rehabilitated or of the system, particularly those shipping When the Corporation was set up in 1924, built up to a point where the purchaser has less-than-bargeload freight. We made pro- its operations extended from New Orleans carried out his service obligations and ap
vision in the contract for cargo service sub- to St. Louis on the Mississippi River; from pears reasonable to continue such service. stantially similar to that furnished now.
New Orleans via the inland waterways to 4. The balance may be used for increasing "From 1939 through 1952, the system piled Mobile, thence up the Warrior River system working capital and/or for making advance up losses totalling $9,749,000, losing money to Port Birmingham, Ala. Subsequently the payments on the principal due.
in 12 of the 14 years. We liquidated a Gov- service was extended on the upper MissisThe purchaser may pay no dividends until ernment-operated system, in which losses
sippi from St. Louis to Minneapolis; on the the entire purchase price and accrued inter- over the years had been made up by the tax- Illinois waterways system from St. Louis to est have been paid.
payers, and we obtained for the public the Chicago;' and on the Missouri River from The agreement further provides for the highest sales price ever offered for it. St. Louis to Omaha.. payment of damages by the purchaser to In- “Recent administrations have repeatedly In 1926 the Corporation purchased the land Waterways Corporation for defaulted said they would take the Federal Govern- capital stock of the Warrior River Terminal trips, unless excused, ranging from $1,000 to ment out of the barge business. But they Co., a rail line switching facility, extending $3,500 per defaulted trip. never did.
from Port Birmingham to Ensley, Ala., a disA default of 50 percent of required trips in . “As soon as the new administration ar- tance of about 18 miles, where now it conany one year in any one district or division, rived in Washington we promised to do our nects with the Birmingham Southern Railif not excused, will be deemed a total de- best to sell the barge line so that Govern- road, thereby enabling exchange of traffic with fault of the conditions of performance of the ment no longer would compete with private rail lines serving the Birmingham district.
River-rail terminals are available at the
HISTORY OF PURCHASE PROPOSALS
scribing the physical and financial condiprincipal ports along the 3,300 river-miles
The record of various purchase proposals
tions of the corporation was prepared with of the Corporation's operations, thereby per- made to previous administrations also is
facts that would arouse the interest of prosmitting interchange of traffic between river enlightening and significant.
pective buyers. and land carriers. Commerce Department files disclose that
LETTER TO PROSPECTIVE BIDDERS CAPITAL STOCK over the years many communications were
Robert B. Murray, Jr., Under Secretary of The Corporation's originally authorized received by various Secretaries of Commerce
Commerce for Transportation, under whose capital stock of $5 million was increased in from prospective purchasers or lessees. Many
direction the Federal barge lines operated, 1928 to $15 million all of which has been conferences were held. None resulted in
and Corporation Board Chairman Louis S. appropriated. On July 1, 1939, the Corporaoffers that were accepted. Formal proposals
Rothschild then contacted potential custion was transferred to the Secretary of were presented to the Secretary of Com
tomers. Secretary Murray enclosed in each Commerce under Reorganization Plan No. 2. merce by the following:
brochure a copy of the following letter: Over the years the barge line has depre1. A committee of businessmen repre
"In accordance with my recent letter to ciated greatly. The fixed assets have a book senting all segments of the Mississippi Val
you, there is attached hereto material devalue-based on a 20-year depreciation ley, submitted a proposal in January 1948
scriptive of the property, conditions of transschedule of $9,100,000, approximately, but for the purchase of the Mississippi Division
fer and history, financial and otherwise, of the Interstate Commerce Commission's apof the Federal Barge Line. They offered a
the Inland Waterways Corporation which I praisal assigns a value of only $2,900,000. sum not to exceed $2 million for the operat
have assembled for the benefit of prospective This latter figure covers railroad property ing rights, tariffs, 6 towboats, 1 tug, and 99
purchasers. only, no commercial value being assigned to barges.
“The Secretary, in his press release of Febwaterline facilities.
They promised that an additional $4,400,000 would be paid for equipment under
ruary 8, 1953, stressed his intention of disposTONNAGE FIGURES, 1924-52 construction and a minimum working cap
ing of the Corporation as an appropriate inAn analysis of tonnage in the calendar ital of $1 million was to be provided. The
stance of turning a Government-operated years 1924 to 1952 reveals the following facts: record says that due to sectional difficulties
business over to private enterprise. For this the committee disbanded before its offer
reason he has stated that while consideration
would be given to proposals to lease the faWaterline
could be fully considered by the Secretary
cilities with a firm offer to purchase, preferRailroad 1 2. A Mississippi Valley syndicate, acting
ence will be given to proposals providing for Merchan
outright purchase and prompt payment in
for 14 privately owned barge lines, offered
"Proposals in accordance with the attached 1924. 553, 769 518, 079 1,071, 848 another 10 years and an option to purchase
conditions for disposal of the facilities of the 1925. 676, 007 466, 212 1, 142, 219
Inland Waterways Corporation should be 1926 948, 305 394, 251
at any time after the first 5-year period. 1, 342, 556 143, 686
submitted in duplicate not later than June 1, 1927
1,030, 568 609, 309 1, 639, 877 218,162 The proposal was rejected on February 14, 1929 1,074, 939 683, 305 1,758, 244
1953. The Secretary reserves the right to re373, 252 1950. The Secretary of Commerce, at that 1929. 1, 247, 088 328, 141 1, 575, 229 461, 089
ject any and all proposals received." 1930
time, gave as reasons inadequate provision
Eventually seven firm proposals were made 1931 1, 165, 660 316, 091 1, 481, 751 387, 714
for rehabilitating the barge line and because 1932 1, 170, 078 402, 791
by bidders up to that date, among them that 1, 572, 869 272, 183 the proposal would leave the Government 1933 1,067, 804 411, 353 1, 479, 157 319, 329 encumbered with responsibilities and finan
by Mr. Pott, the purchaser. 1934
979, 866 420, 540 1, 400, 406 281, 716 1935..
cial liabilities. 1, 349, 355
BUSINESSMEN STOPPED GOVERNMENT'S COMPE382, 704 1,732, 059 334, 536 1936. 1, 439, 968 416, 546
1,856, 514 503, 826
1, 611, 202 498, 652 2, 109, 854 683, 332 offered to purchase the assets and rights of Thus businessmen in the Eisenhower ad1938
1, 501, 187 | 1, 266, 023 2,767, 210 599, 314 1939
the Corporation for $6 million, half cash 1, 303, 738 871, 960 2, 175, 698
ministration, using business sales methods, 574, 425 1940 1, 416, 046 871, 108 2, 287, 154 587, 146
within 6 months after acceptance of offer took the Government out of business compe1941
1, 419, 434 1, 147, 596 2, 567, 030 444, 689 and the balance payable over a period of tition with private business. They removed 1942
880, 475 | 1, 380, 222 2, 260, 697 227, 695 years in annual installments of 50 percent a load from taxpayers and drove a good bar1943.
712, 651 1, 220, 011 1,932, 662 240, 834 1944. 494, 476 1, 589, 680
net profits before taxes. The Assistant Sec2,084, 156 347, 085
gain for the public. Moreover, all who pa1945 349, 327 | 1, 539, 932 1,889, 259 523, 598
retary of Commerce requested additional in. tronize the lines will have the continuing ad. 1946
479, 975 | 1, 168, 483 1,648, 458 634, 059 formation on July 3, 1950, but Commerce vantages which alert, efficient private man1947 610, 140 | 1, 401, 490 2,011, 630
924, 642 Department files do not disclose any further 1948 597, 666 1,838, 292
agement always offers in comparison with 2, 435, 958 1,089, 930 communications from the prospect. 1949. 704, 051 1,794, 963 2, 499, 014 | 1, 105, 140
the slow motion of diffident or neglectful 1950. 762, 741 | 2,058, 513 2,821, 2541, 547, 520 4. A group of businessmen from St. Louis
590, 204 2,073, 775 2,663, 979 1,312, 157 and New York in January 1951 submitted 1952 584, 444 1,969, 2322, 553, 676 1,082, 870
A HALT TO INTRUSION ON PRIVATE BUSINESS a proposal involving the payment of $772,000 cash plus long-term notes for $6 million,
I am sure that the public and this con1 Acquired May 1, 1926. payable $300,000 annually for 9 years and
gress is in hearty agreement with the action REVENUES AND EXPENSES FOR 1924-52 $3,300,000 at the end of the 10th year.
of the Secretary of Commerce in the Eisen
hower administration, whose sale of the FedAn analysis of operating revenues and ex
They agreed to complete acquisition of
eral barge line has called a halt to Governpenses for the calendar years 1924 to 1952 equipment on order ($1,500,000), to place
ment's intrusion in one area of private shows the following facts:
immediate orders for new equipment to cost
But Secretary Weeks has done even more quisition of additional equipment, costing Year Operating Operating Operating Net in.'
for the public_he has served customers, expenses
$5 million to $7 million.
workers, and taxpayers. That's the keynote of the Department of Commerce advised
of the administration's economic policies— 1924..... 3, 499, 631 4,052, 663 1 553, 032 1 550, 925
sound measures that benefit all the people. 1925. 4,004, 578
them that the Secretary of Commerce had 4, 071, 686 167, 108 1 59, 366 1926. 5, 262, 469 5, 071, 139 191, 330 192, 841 decided not to accept the offer. 1927 6, 287, 840 6, 347, 297 1 59, 457 1 43, 286 5. The current purchaser, Herman T. Pott, PRESS RELEASE BY SECRETARY OF COMMERCE 1928. 6, 927, 341 6,539, 046 388, 295 375, 893 on July 3, 1952, made a tentative offer of
SINCLAIR WEEKS 1929 6, 789, 463 6,887, 259 1 97, 796 16, 479 1930... 6, 338, 363 6, 310, 677 27, 686 145, 622
$3 million to purchase the Corporation. At Secretary of Commerce Sinclair Weeks, 1931... 6, 576, 100 6, 324, 010 252, 090 322, 625 a conference with the then Secretary of with the approval of President Eisenhower, 1932 6, 297, 531 5, 875, 162 422, 369 475, 805 Commerce the proposal was rejected and an 1933. 5, 212, 734 5, 181, 553 31, 181
today sold the Government barge line to the 88, 691
alternative plan was suggested by Mr. Pott, 1934. 4, 470, 135 5, 436, 049 1 965, 914 1 896, 959
Federal Waterways Corp. of Delaware. 1935. 6, 173, 183 5,588, 415 584, 768 757, 582
combining leasing of the equipment with In addition to the sales price of $9 million, 1936. 6, 628, 969 6, 249, 181 379, 788 485, 402 an option to purchase. But nothing came the United States Government retains quick 1937- 7, 238, 914 7, 110, 402 128, 512 253, 935 of it. 1938 8,087, 452 7,090, 269 997, 183 1, 140, 826
assets of the Inland Waterways Corporation 1939. 6,935, 456 7, 343, 013
1 407, 557
which, after deduction of current liabilities, 1940. 7, 442, 083 7,834, 360 1 392, 277 1 273, 725
should net approximately $2,700,000 in cash 1941. 8, 200, 017 8, 518, 224
1 318, 207
As soon as Secretary Weeks assumed office
1 159, 129 1942.. 7, 480, 635
and accounts receivable, 8, 378, 275 897, 640
1 726, 492
on January 20, 1953, he announced his de1943. 8, 270, 013 8, 433, 377 163, 364 178, 012 termination to sell the system and he did.
The Federal Waterways Corp. of Delaware 1944. 8,661, 538 9, 157, 099 1 495, 561 1385, 545 He got a higher price for the public than
is a new and wholly owned subsidiary of 1945. 7,907, 323 8, 796, 761 1 889, 438 1 845, 252
the St. Louis Shipbuilding and Steel Co., of 1946. 5, 613, 002
any of the offers just described. 8, 211, 254 12, 598, 252 12, 541, 980 1947. 7, 545, 094 9,453, 781 11, 908, 687 11, 914, 425 But the achievement was the result of ag
which Herman T. Pott, of St. Louis, is the 1948. 9,542, 470 11,033, 664 11,491, 194 11, 480, 262 1949. 9,587,316 | 10, 256, 549 1 669, 233 11, 153, 766
gressive salesmanship and patient negotia president. Mr. Pott is chairman of the board 1950.. 10, 741, 655
of the Federal Waterways Corp. 11, 144, 390 1 402, 735
tion. Secretary Weeks' announcement of the
1 397, 156 1951. 10, 714, 642 10, 845, 612
1 130, 970 1 128,788 proposed sale prompted nibbles from all sec- “The sale is a good business transaction 1952.. 10, 911, 619 10, 538, 688 372, 931 379, 385 tions of the country. In all, 200 inquiries for the taxpayers,” declared Secretary Weeks.
were received from prospective bidders as to "It not only will add a substantial sum to 1 Indicates loss.
terms and conditions. A brochure fully de- the United States Treasury but it also will XCIX -611
a congestion of the railroads that it became nécessary to turn to inland waterways.
Operations commenced on the lower Mississippi with the first sailing from St. Louis on September 28, 1918. The hastily acquired fleet consisted of 5 towboats and 29 barges. Service on the Warrior River began in December of that year with 1 towboat, 2 selfpropelled barges, and 10 coal barges.
The operations begun by the Railroad Administration on inland waterways continued to February 29, 1920, when the Governmentowned facilities were transferred to the Secretary of War for operation under the terms of the Transportation Act of 1920.
On July 19, 1924, Secretary of War John W. Weeks, father of Sinclair Weeks, now Secretary of Commerce, signed an order under the Transportation Act transferring to the newly created Corporation all inland waterways' assets and facilities under his control.
On February 8, 1953, Secretary of Commerce Weeks announced his intention to take the Government out of the barge-line business. At that time he invited inquiries from private sources interested in the possi. bility of purchasing the business.
He received approximately 200 inquiries from all sections of the country, and each inquirer was sent a brochure describing the physical and financial condition of the Corporation and setting forth the terms and conditions of sale. Seven firm offers were finally received by the Secretary and after scrutiny the successful bidder was Federal Waterways Corporation.
place the property where for the first time able quantities delivered at or destined to it will yield annual tax revenues to the Port Birmingham, Ala., and such on-line Government.
cargo in reasonable quantities as may be of“The sale is a good thing for the users of fered for transportation. the system, particularly those shipping less- (g) In the event transportation to Sioux than-bargeload freight. We made provision City, Iowa, becomes practical and feasible, in the contract for cargo service substantially the purchaser will extend service to this similar to that furnished now.
area to provide such services as are justified "From 1939 through 1952, the system piled in the light of demand therefor and cargo up losses totaling $9,749,000, losing money available. in 12 of the 14 years. We liquidated a The contract further provides that at inGovernment-operated system in which losses termediate ports and landings, calls will be over the years had been made up by the made and barges spotted whenever a reasontaxpayers, and we obtained for the public able quantity of cargo is offered for transthe highest sales price ever offered for it. portation.
“Recent administrations have repeatedly The agreement further provides for the said they would take the Federal Govern- payment of damages by the purchaser to Inment out of the barge business. But they land Waterways Corporation for defaulted never did.
trips, unless excused, ranging from $1,000 to "As soon as the new administration arrived $3,500 per defaulted trip. in Washington we promised to do our best A default of 50 percent of required trips to sell the barge line so that Government in any one year in any one district or division, no longer would compete with private in- if not excused, will be deemed a total dedustry. Today's action is proof that we have fault of the conditions of performance of the kept our promise.”
contract. A default in common-carrier Involved in the sale are physical facilities service on 30 percent of the required trips consisting of 20 towboats, 4 tugs, and 253 in any one year on which common-carrier barges, in addition to 20 barges and 1 tow- service is to be provided will, if not excused, boat now under construction.
also constitute a total default. The sale calls for the purchaser to put in
Under the terms of the agreement, 14 per$1 million in new working capital and in cent of the total tonnage each year, or 375,addition to pay $9 million over a period of 000 tons, whichever is lower, must comprise 10 years, plus interest at the rate of 334 less than bargeload traffic. Default on this percent annually.
requirement will mean the payment of damThe agreement provides that the purchaser ages to Inland Waterways Corporation of $2 may prepay any or all installments and ac- per ton of deficiency. A deficiency of more crued interest. The agreement also restricts than 150,000 tons will be deemed a total the payment of dividends until the entire default. purchase price of $9 million, plus accrued In the event of breach of contract the Govinterest, has been paid.
ernment has recourse to the courts to enIn support of the interest of the people force performance or to recover damages, or of the area, the administration obtained an by written notice to terminate the agreement agreement from the purchaser to continue and repossess the facilities sold, possess new common-carrier service in a manner sub- facilities acquired, and demand the surstantially similar to the services rendered render of any retained net earnings. by the Inland Waterways Corporation.
Breach of contract includes (1) default It is required that there be
on principal installments; (2) failure to 1. Adequate provision for transporting
transporting maintain minimum working capital of not such less-than-bargeload and less-than- less than $600,000 net; (3) total default in carload shipments as can reasonably be anti- providing transportation service; (4) failcipated, and that there be active solicita- ure to perform any other covenants or tion of such shipments.
agreements of the contract; and (5) assign2. Maintenance of such joint tariffs with ment to creditors or bankruptcy. rail carriers as shall make generally avail- Over the years the barge line has depreable the privileges of joint rail and water ciated greatly. The fixed assets have a book transportation upon terms reasonable and value, based on a 20-year depreciation schedfair to both rail and water carriers, and ule-of $9,100,000, approximately, but the maintenance of reasonable and fair joint Interstate Commerce Commission's appraistariffs with motor carriers whenever feasible al assigns a value of only $2,900,000. This in the promotion of transportation service. latter figure covers railroad property only,
3. Arrangements for interline traffic with no commercial value being assigned to waother transportation services.
terline facilities. 4. Transportation service in specified dis- The Corporation operates the most comtricts and divisions and the making of speci- plete common carrier service by barge offied minimum trips as follows:
fered on the Mississippi, Illinois, Missouri, (a) From the port of New Orleans, La., to and Warrior Rivers. All types of freight, exthe port of St. Louis, Mo., and return (de- cept livestock and perishables, are handled signated as the lower district), 125 trips on 3,300 miles of inland rivers. Operations per annum in each direction.
are conducted through numerous private (b) From the port of St. Louis, Mo., to the terminals as well as through 20 general merports of St. Paul and Minneapolis, Minn., and chandise facilities. including Stillwater, Minn., on the St. Croix The Corporation also operates a railroad River, and Port Cargill and Black Dog, Minn., switching facility, approximately 18 miles, on the Minnesota River, and return (desig- between Port Birmingham and Ensley, Ala., nated as the upper district), 40 trips per to serve the industrial area in and near Birannum in each direction.
mingham, Ala., and to provide a connecting (c) From the port of St. Louis, Mo., to link between the Corporation's Warrior Rivthe port of Chicago, Ill., and return (desig- er barge service and the trunk-line railroads nated as the Illinois district), 75 trips per serving the Southeast. annum in each direction.
The Inland Waterways Corporation had (d) From the port of St. Louis, Mo., to the its origins in a study by the Council of Naport of Omaha, Nebr., and return (designated tional Defense in June 1917 looking to the as the Missouri district), 16 trips per annum more effective use of domestic waterways. in each direction.
Under the Federal Control Act of March (e) From the port of New Orleans, La., to 21, 1918, the Director General of Railroads port Birmingham, Ala., and return (desig- commandeered privately owned floating nated as the Warrior River division), 18 trips equipment on the New York State Barge per annum in each direction.
Canal and on the Mississippi and Warrior (f) From Port Birmingham, Ala., to the Rivers and initiated the construction of new city of Ensley, Ala., and return (designated floating equipment. The unprecedented as the railroad division), such trips as may wartime demands for transportation to supbe necessary to transport cargoes in reason- ply United States troops overseas caused such
MEMORANDUM FOR MEMBERS OF THE CONGRESS
Washington, July 24, 1953.
The law (49 U. S. C. 151–157) authorizes us to sell the facilities of the Corporation and we have been careful to carry out the intent of the Congress.
For some years there has been considerable talk of selling the business, but although five specific attempts to purchase were made since 1948 and prior to January 20 this year, these attempts were all abortive and the new administration found the problem before it when we took office last January.
The problem seemed difficult, first because the Corporation for the last 14 years netted a loss of $9,749,000, having made a profit during that period for only 2 of the 14 years.
Furthermore, the difficulties were not lessened by a report of the Interstate Commerce Commission made to the President on December 17, 1952, in which it was observed that because of statutory requirements as to continuation of service, the value of the property was very substantially impaired and the notation was made that unless legislative restrictions as to such continuation were removed, a “sale is now impossible.”
We proceeded, however, to solicit bids for delivery on June 1, and of the total of 7 which came in on that date, we determined, after study, that 3 were entitled to further consideration.
And after such consideration, we have now, as indicated above, sold the property to the Federal Waterways Corp., a wholly owned subsidiary of the St. Louis Shipbuilding & Steel Co., which was the highest bidder.
Before outlining the terms of sale, it is well to have understood exactly what we are selling.
The fixed assets have a book value-based on a 20-year depreciation schedule of $9,100,000, approximately, but the Interstate Commerce Commission's appraisal-noted above-assigns a commercial value of only $2,900,000. This latter figure covers rail