material, and more is arriving daily. Of course, details are prohibited.

Manganese ore in excess of 70,000 tons has come in within recent months. Two hundred and sixty thousand tons of manganese ore are now under contract to move through this port during the remainder of this year.

Just a word in illustration of savings that would be effected by giving us this water transportation. The railway rate on lead to St. Louis and Ohio River points is between $10 and $12 per ton. The water rate is between $3.50 and $4.

On manganese ore, the railway rate to Houston, Tex., is $8.53. The water rate is $3.50. Houston is 400 miles distance. To show you the discrimination from which our section is suffering in railroad rates, the rate on manganese ore from Brownsville to Houston, 400 miles, is $8.53; to Kansas City, 1,100 miles, it is $7.40. If anyone can offer an adequate explanation of the frame of mind of the Interstate Commerce Commission in maintaining such rates, I do not know what it is. There is certainly one thing the Commission has in common with the Almighty, and that is that it moves in a mysterious way its wonders to perform.

On canned goods the railway rate to New Orleans was $15.40 when we opened the two ports we have in that valley, and the water rate was $6.40; to New York it was $33 by rail, and the water rate was $8. The railway rate has since been reduced to $21.20, with the water rate remaining at $8 when available. Of course, we do not have it now. There are no longer ships entering there. That meant a saving of $13.20 a ton on shipments to New York. Similar savings on incoming freight would be made.

The barges would not return empty. Machinery, building materials, hardware, and any number of varieties of slow freight would, of course, come in barges returning south and west.

In conclusion, I feel about this as Mr. Miller does. We must not, it seems to me, regard this simply as an emergency measure but as a measure that will mean permanent and enormous benefit to our country. It would unquestionably mean beginning within 6 months-beginning this coming winter-a partial relief of the oil shortage along the Atlantic Seabord. When we think of the problem of additional facilities, let us always keep in mind the fact that experience has absolutely proved to us that we can successfully carry any type of product on wooden barges excepting only gasoline. I thank you very much.

Senator BAILEY. We shall now have to recess in order to go to the Senate.

I should, however, like to remark that we are not raising here any controversy about the railroads and railroad rates, although there is a difference in the rates. The United States Government furnishes a roadbed for ships on the canals, pays for all the upkeep, and charges no taxes. The railroad people furnish their own roadbeds and are made to keep them in very fine shape and then pay a large amount of taxes. That may not explain these mysterious ways that our friend referred to, but it throws some light on the subject.

Another thing is that wages on the railroads are fixed by the Federal Government or under its supervision, and those wages are much higher than they are on the waterways.

So, I should not like to prejudice the case of the railroads on the plain statement that their rates are fixed in some mysterious way. I think there is some explanation.

Mr. CREAGER. The mystery is not in the difference between water and rail rates but in the fact that the rates from Brownsville, Tex., to Houston, Tex., 400 miles, are higher than the rates on the same goods from Brownsville, Tex., to Kansas City, Mo.

Senator BAILEY. I think you do not follow the mileage basis; you never have. There are reasons for it, but we will not go into them

now.

Will it be agreeable to the subcommittee to meet at 2:30 o'clock this afternoon and continue the hearings?

Senator CLARK of Missouri. It is agreeable to me.

Senator CARAWAY. And to me.

Senator BAILEY. Mrs. Caraway, can you be here, then?

Senator CARAWAY. Yes.

Senator BAILEY. I will ask you to preside. I have here a list of witnesses.

We shall recess until 2:30 this afternoon.

(At 12:15 p. m. a recess was taken until 2:30 p. m. of the same date.)

AFTERNOON SESSION

The subcommittee reconvened at 2:30 p. m., at the expiration of the recess.

Senator BAILEY. The subcommittee will come to order.

Is Mr. Allan K. Swann here? (No response.)

Is Mr. Sam H. Jarvis present? (No response.)

Mr. C. Hayden Davis? (No response.)

Mr. E. O. Thompson?

Mr. MILLER. Colonel Thompson is due here today, Senator, but I do not think he has arrived yet.

Senator BAILEY. Mr. Walter Lechner? (No response.)

Mr. Oscar E. Dancy? (No response.)

Mr. Ernest R. Graham? (No response.)

Mr. E. B. Germany? (No response.)

Mr. Dempsey, you are here. We will hear from you now, if you are ready.

Mr. DEMPSEY. Thank you, sir.

STATEMENT OF S. WALLACE DEMPSEY, WASHINGTON, D. C.

Mr. DEMPSEY. Mr. Chairman and gentlemen of the committee, I was chairman of the House Committee on Rivers and Harbors for 10 years, and I was always interested in this project. Now it has arisen as an emergency which divides itself first, into a pipe line—

Senator BAILEY (interposing). Mr. Dempsey, do you represent any interest or connection?

Mr. DEMPSEY. No, sir.

Senator BAILEY. Are you just speaking for yourself?

Mr. DEMPSEY. Yes, sir. I did represent at one time a concern at Harlingen, Tex., in an effort to extend the canal, but I do not under

stand that that is involved here. (See corrections at the end witness statement.)

The first matter to be considered is the pipe line. It must be conceded that the pipe line will transport a very considerable amount of oil; and oil is an emergency product, and that will aid the war effort.

The question was raised as to whether or not a 24-inch pipe was preferable to an 8- or 10-inch pipe. The answer is that you can have three or four of these smaller pipes which will transport the same quantity and, in addition to that, pipe of that kind is available as second-hand pipe, so that we do not get involved in the shortage of steel.

To the extent, then, that it does transport oil, to that extent, it is a valuable aid in this emergency.

The Senator from Michigan has observed that sometime in 1941, as I understood, an act was passed which would authorize the Executive to build this pipe line without further action, and he suggests that as a reason for not passing this bill.

As I understand it, the Executive is a servant of the legislative branch as to these acts, and it is not unusual, when a servant does not comply promptly with an order for the master to give a second order, particularly where the master has to exercise his individual judgment and where the matter is of great importance.

Senator BAILEY. It was agreed in the House hearings that the President had the power. We gave it to him for the purpose of coordination. If we are going to interfere with the exercise of that power and divide it and instruct him, then there is no telling what the upshot will be in the matter of legislation.

So far as the pipe line is concerned, it is in evidence in the House committee hearings that the line is projected, agreed upon, and authorized, and they have got ready to go, I believe. Senator Pepper is here, and perhaps he can tell us. Are they going ahead with that pipe line?

Senator PEPPER. I believe they have resolved to build an 8-inch pipe line of used pipe across from the vicinity of Port St. Joe to Jacksonville.

Senator VANDENBERG. The final word on it is that the financing is pending before the R. F. C. today, is it not?

Senator PEPPER. That is right.

Senator VANDENBERG. It requires no appropriation.

Mr. DEMPSEY. It does not seem to me, with all deference, that an expression by the Congress and it is nothing more-that they deem it important in the war effort could result in anything except impressing the Executive with the fact that Congress does so regard it. Senator VANDENBERG. Are you not transferring by this legislation pipe-line control from the Petroleum Coordinator to the Secretary of War, and are you not making an appropriation when the President is proposing to proceed without an appropriation? Are not those things of some signifiance in their relationship to this problem?

Mr. DEMPSEY. Well, as to your first question, with reference to the transfer, probably either of the parties would do the work equally well, although I should say from my observation and from long experience on the Rivers and Harbors Committee of the House, that

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the engineers are perhaps better qualified to do this particular work. Senator VANDENBERG. Did they ever build a pipe line in their lives?

Mr. DEMPSEY. It is their business to do construction work, Senator, and it is not the business of the Interior Department to construct to the same extent, or really to any appreciable extent. So I should not think that that would be material.

As to the question of an appropriation, I do not see that that is material. The money is going to be expended.

Senator VANDENBERG. Three million dollars instead of $13,000,000? I do not suppose that is material either.

Mr. DEMPSEY. I do not think that will result, Senator, at all. I think that the amount of money would depend on what the cost of the line actually is. I had the honor to be associated with the engineers for a long period of time. I believe they are as efficient, as public-spirited, as splendid a body of men as we have in the Nation, and I believe that they will do a tremendously good job of anything that they are commissioned to do.

Senator VANDENBERG. Do you think we should transfer the other pipe lines to the Board of Engineers for Rivers and Harbors that are about to be constructed by the Coordinator?

Mr. DEMPSEY. I have not studied that question, Senator. I have found it difficult enough to be able to answer sharp cross-examiners like the Senator from Michigan on just one line.

Senator VANDENBERG. Do you not think that it is essential in this war effort to concentrate responsibility in one place?

Mr. DEMPSEY. You cannot concentrate all responsibility in any one place. It is just impossible. It is too magnified an object to even attempt to do that.

That is all that I care to say in answer to that particular objection.

Senator PEPPER. If the Chairman and the witness will permit a brief interruption, I have sent for a copy of the pipe line authorization bill to which reference has been made, and I thought we would not interrogate until we had that before us. There are a few differences that I think of in my own mind.

Senator VANDENBERG. I can tell you now that it is Public Law, 197, of the Seventy-seventh Congress, and it provides that whenever the President finds that the construction of any pipe line for the transportation and/or distribution of petroleum or petroleum products moving in interstate commerce, or the extension of any such pipe line already wholly or partly constructed, is deemed necessary for national defense purposes, he shall by problamation declare such finding. In the event that it is impracticable for any private person properly and satisfactorily to construct, extend, or complete such pipe line, the President, if in the opinion that such action is desirable in the interest of national defense, may provide for the construction, extension, completion, or operation of such pipe line by such department or agency of the Government as he may designate.

That is complete, total authority.

Mr. DEMPSEY. Senator, may I say this? It seems to me that your question as to the transfer of authority answers itself. Senator VANDENBERG. I thought it did.

Mr. DEMPSEY. The Coordinator will necessarily employ engineers. Engineers will do the work of laying this pipe line. It is an engineering task; and it would seem to be a question whether you would take the most experienced engineers in the country, with the highest reputation-and the present Chief of Engineers is a very wonderful manor whether you should go out and get engineers from the field at large. That would not seem to me to be a question of the transfer of authority. Now, let us come next to the question of a canal across Florida. I want to say at the start that I have always been opposed to a deep-sea canal across Florida. The objection in the minds of many seems to be that the barge canal is a forerunner or a forecast of a deep-water canal. While theoretically I am opposed to a deep-water canal, the only way that I can see that a barge canal would lead to the construction of a deep-sea canal is by its being proved by experiment and experience that my thoughts and theories in regard to it are wrong, and that, instead of its not being justified, it is justified by experience. But I am not so wedded to my theories that I am not ready to risk a demonstration that I am wrong. That would seem to me to be all there is to this question of a fear of a deep-sea canal.

The next question is that it is going to take some time. That is true of practically all of our war effort. It takes time to convert the great automobile works of the country from making trucks and automobiles into doing war work. It takes time to build new plants. It takes time to put in new machinery. This is absolutely in line with every effort, and it takes a comparatively short time, only 15 months; and there is not a man of us who would want to proceed upon the theory that this war is going to end within that 15 months. That would be a fatal gamble. That would be a condition upon our efforts that none of us would dare to impose. So I see no possible objection upon that score. Next, it is suggested that water transportation is slow. Of course, water transportation is slow. It has always been slow. But look at the Great Lakes. We are transporting practically through your territory, Senator Vandenberg, all of the iron ore of the country, about 100,000,000 tons, probably, this year.

Senator VANDENBERG. Not in barges, however.

Mr. DEMPSEY. No; but in vessels, by water, and on canals open to transportation the whole year round, whereas Great Lakes transportation is available only several months of the year-so the longer season makes up for the difference in the size of the boats, and it is slow transportation. All water transportation is slow and always has been slow. This will be no slower than other water transportation. Water transportation has stood the test of time for all slow-moving nonperishable property. So that cannot be an objection.

Next, they say you have not got the barges. We are going to have 15 months in which to construct barges, and that is ample time to construct wooden barges. Wooden barges are what we need and what we will have, and we will have them in abundance within 15 months.

Next it is suggested, well, suppose you get your barges; you have not got your engines. As I understand it, the difficulty about engines is that the Government has attempted to have engines supplied on dozens of models. There is no reason why we could not have one model and produce these engines in mass quantities, just as they do for automobiles. That is undoubtedly what will be done, and we