ered by itself, since there are two other projects under construct which will be completed at approximately the same time as the s way and which also relate to waterway transportation.

I have in mind the development of the port of Chicago by Chicago Regional Port District, and the improvement of the Channel connecting the Great Lakes waterway system with Mississippi River system.

These improvements will provide adequate facilities for the h dling of export and import traffic, the interchange of traffic with r lines and motor carriers, and between lake and ocean vessels, on one hand, and river barges on the other hand.

The construction of the port facilities by the Chicago Region Port District will be explained in detail by Maxim M. Cohen, general manager.

Widening of the Sag Channel was started last year, and it is anti pated that this work will be completed in 1960.

EFFECT OF WATERWAY PROJECTS ON TRADE

Analysis of these improvements, namely, the St. Lawrence seawa the development of adequate port facilities, and the widening of t Calumet-Sag Channel, clearly indicates a tremendous growth wholesale and retail trade, industrial development, and in increas employment.

I would like to give you just an analysis of this in relation to Ch cagoland's future.

The following estimate of what the St. Lawrence seaway, the ne port of Chicago in Lake Calumet, and the improved Calumet-Sa Channel will do for the Chicago metropolitan area is projected f 15 years after their completion.

Estimates are based on gains solely attributable to the waterwa improvements and do not include gains attributable to any othe concurrent developments.

Wholesale trade: The Chicago metropolitan area's wholesale trad now averaging about $16.5 billion a year may average $22 billion year, largely because of increases in the Midwest's improved abilit to compete in the world's markets and, also, because of trade diverte to this area from eastern seaports.

Retail trade: The area's retail trade, now averaging $7.1 billion year, may average $9.5 billion a year because of employment an population increases which will be explained later.

EFFECT ON INDUSTRIAL DEVELOPMENT

Industrial development: Investment in industrial plant facilitie may be up $3 billion for land and buildings only, or $10 billion in cluding machinery, equipment, and materials. This is almost equiva lent to the money invested in the Chicago metropolitan area in new of enlarged plants since 1940.

Reason for the added investment of $10 billion is found in the fact that the waterway improvements will make 15,000 acres of land available for industrial purposes. This land will be in the Lake Calumet, Gary, Calumet-Sag area. Much of it will have deepwater

or barge-water frontage favored by the iron, steel, heavy machinery, chemical, construction, shipbuilding, and repair industries.

EMPLOYMENT RESULTING FROM WATERWAY PROJECTS

Jobs and workers: Within the 15-year period, this land may be fully occupied by the kinds of industries indicated. These can directly provide jobs for 300,000 people and indirectly for perhaps 450,000 more. Between 1940 and the present, factory workers in the Chicago area increased by 310,400. Other types of workers increased by 474,600. Over the same years, Chicago area investment in industrial plants was about $10 billion. The 474,600 figure includes the workers in the factories which will serve the new plants, and the workers in a wide variety of corollary businesses which will serve the new plants, their workers and their families.

Jobs directly connected with water transportation may total 40,000 compared to about 3,000 as at present. The larger figure includes the crews on the increased number of ships, barges, and tugs; the workers in the Lake Calumet terminal; and those in the offices of shipowners, agents, and brokers.

Another 100,000 new jobs may result from our enlarged export and import operations-by our manufacturers, wholesalers, and retailers; by our banks, insurance companies, freight-forwarding companies, packing companies, customhouse brokers, and by a wide variety of other kinds of businesses.

The estimated grand total of new jobs, which can result directly or indirectly from the 3 waterway projects, is 890,000. This impressive number of new workers-based on the present ratio of jobs to people in the area-can support an added population of approximately 1,900,000 persons.

NECESSITY FOR DEEPENING OF GREAT LAKES CHANNELS

Deepening of the Great Lakes channels: One of the important phases of waterway improvements needed to provide Lake Michigan and Lake Superior with an opportunity to fully utilize the advantages of the St. Lawrence seaway is the deepening of the Great Lakes connecting channels. At present the upbound channel, connecting Lake Huron with Lake Erie, has a depth of 21 feet. Congress has approved the deepening of this and other connecting channels so as to provide a controlled safe draft for vessels of 25.5 feet when the lakes are at low-water datum.

It is our understanding that $5 million have been appropriated for design and construction. Our association supported this project before congressional committees, not only because it is needed to permit Lake Michigan ports and the Chicago metropolitan area and the communities served by the Mississippi River system throughout the Midwest to fully utilize the advantages resulting from the construction of the St. Lawrence seaway, but also to provide more economical transportation of bulk commodities between the several lakes.

Army engineers estimated that the annual average tonnage for the life of the project would be 192,700,000 tons, more than 4.7 times the tonnage moving through the Panama Canal in 1955.

Because of this importance of the deepening of the Great Lakes connecting channels, we urge that adequate appropriations be made from year to year so that Army engineers may complete this project by 1958 when it is estimated the St. Lawrence seaway project will be completed, or as soon thereafter as possible.

FREE TIME TO BE ALLOWED BY RAILROADS

Free time at the port of Chicago: Another factor which will have an important bearing upon the full utilization of the St. Lawrence seaway is the extent of free time which will be allowed at Great Lakes ports by railroads for unloading railroad cars in order to place such ports on a proper competitive relationship with salt-water ports.

At the present time railroads permit 2 days for the unloading of cars containing export freight at Great Lakes ports, but allow 7 days at North Atlantic and gulf ports and 10 days at Pacific ports. While some of the Western railroads have published tariffs to allow 7 days free time for unloading cars containing export freight at Lake Michigan ports to place such ports on a competitive basis with North Atlantic and gulf ports, these tariffs have not been permitted to become effective by the Interstate Commerce Commission.

A formal complaint has been filed with the Interstate Commerce Commission by the Chicago Regional Port District, contending the present situation unduly discriminates against Great Lakes ports to the advantage of salt-water ports.

Our association is intervening in this case and will offer testimony at hearings to be held in Chicago on October 8. It will be our contention that conditions at Great Lakes ports are substantially the same as those at salt-water ports justifying the same treatment, and that 7 days free time for the unloading of export freight is necessary.

DIVERSION OF WATER FROM LAKE MICHIGAN

Diversion of water at Lake Michigan: Another matter of considerable importance to the Chicago metropolitan area is the diversion of an adequate amount of water from Lake Michigan into the Chicago Sanitary and Ship Canal and ultimately into the Illinois and Mississippi Rivers.

"Our interest in this lake diversion matter goes back as far as the date of the organization of our association. We fully recognize the importance of an adequate sewage disposal system. We have worked in support of such legislation since its inception in the Congress.

We supported H. R. 3300 in the 83d Congress, which was passed by the Congress but vetoed by the President. We also supported H. R. 3210 in the last Congress, and this bill was also passed by both the Senate and the House, but again vetoed by the President.

Senator MANSFIELD. Mr. Chairman, could I ask the witness a question at that point?

Senator WILEY. Yes.

WATER LEVEL STUDIES OF CORPS OF ENGINEERS

Senator MANSFIELD. The witness has referred to the fact that the Corps of Engineers has carried on a water-level study vis-a-vis the

diversion of water of the Great Lakes, which is a matter before the committee at the present time.

Mr. Coulter, do you have any assurances from the Corps of Engineers as to when they will have the study completed?

Mr. COULTER. Well, sir. I don't know whether it is the best information, but I think probably the information with the greatest import in relation to this diversion matter came as a result of the study made by this Joint Commission in Lake Erie. It is included in a report by a joint Canadian and American Commission, and their report is in and final. It was in this report that they stated the effect of diversion in Chicago would be insignificant so far as power and navigation purposes are concerned.

Senator MANSFIELD. Yes; but is it not a fact that the Corps of Engineers is presently undertaking a survey, too?

Mr. COULTER. I am not familiar with any such survey, but it is my understanding that the survey would be made as part of this lake diversion bill.

Senator MANSFIELD. Mr. Chairman, I see the Corps of Engineers general out here.

Could you give us the answer, General?

General BERRIGAN. Well, there are three reports.

One, which he referred to, has been made public but has not been blessed by the International Joint Commission. That was the 3-year 1,000 second-foot temporary diversion.

There is also another report, on the effects of diversions on the levels of the waters of Lake Ontario, but it includes all diversions. That report is now before the International Joint Commission.

Now, the final report, the study the corps is making of the levels of the lakes, will be completed by the division next June; and allowing the usual time, it will probably be next fall before it gets to the Board of Engineers for Rivers and Harbors.

RECOMMENDATION THAT CORPS OF ENGINEERS SPEED SURVEY

Senator MANSFIELD. Mr. Chairman, I would suggest to you, as chairman of this subcommittee, that in view of Senator Dirksen's extremely active interest in this matter over the past several sessions, and the two vetoes by the President of the United States, that this committee recommend to the Corps of Army Engineers that they speed up that survey as quickly as possible so we can have it before us for action during the next Congress.

Senator WILEY. I think that is a very good suggestion and, of course, the subcommittee can make that recommendation to the general committee.

You can consider it, sir, as a very desirable recommendation.

Senator DIRKSEN. General, all that is supplemented, of course, by the action of the President incident to the veto, namely, the instruction to the State Department to begin immediate negotiations with Canada. General BERRIGAN. Yes, sir. And, of course, we got similar instructions to try to speed up the report on the lake levels study.

Senator MANSFIELD. I might suggest, Mr. Chairman, in your capacity as chairman of this subcommittee, too, that you communicate with the State Department and ask them to speed up their study of this particular matter, as well.

Senator WILEY. I will be very happy to follow that suggesti My assistant will take notice accordingly.

Is that agreeable to you?

Mr. COULTER. That is very agreeable; that accomplishes exac what we are seeking.

Senator DIRKSEN. Mr. Chairman, I shall be delighted indeed supplement the action of the chairman, knowing he and I have be in very sharp disagreement with diversion, so I will be most help in getting early action by the State Department.

Senator WILEY. Let the record show he is always helpful, even he is in disagreement.

Mr. COULTER. I should be happy to do so, sir.

DIVERSION OF WATER FROM LAKE MICHIGAN

The President vetoed the bill passed by the 83d Congress for t following reasons:

That (1) existing diversion was adequate for navigation of the Illinois a Mississippi Waterways, (2) all methods of control of lake levels and protecti of property should be considered before arbitrarily proceeding with the pr posed increased diversion, (3) legitimate interests of other States affected the diversion may be adversely affected, and (4) the diversion was authoriz without reference to negotiations with Canada.

The President's memorandum of disapproval of the bill passed the last session of Congress was substantially the same in purpose an effect as that given for the veto of the legislation in 1954.

Certain new factors have developed since 1954 which in our judg ment clearly justify favorable action to step up the diversion rate fro 1,500 to 2,500 cubic feet per second for a 3-year test period. Amon these are:

(1) Additional diversion is necessary for navigation and sanitar needs.

(2) Specific legislative intent by the Congress relative to the neces sity of lake diversion for sanitary reasons.

(3) The conclusions of the International Lake Ontario Board o Engineers Report to the International Joint Commission, on the ef fect on Lake Ontario levels of an increase of 1,000 cubic feet per sec ond in the diversion at Chicago, for a period of 3 years, which in part are as follows:

24. The maximum temporary reduction in lake levels would be about five eighths inch. It is considered that this reduction would have no significan effect on navigation.

25. It is considered that the computed reductions in dependable capacity of 2,600 and 2,750 kilowatts at Niagara River plants in Canada and the United States, respectively, and of 2,145 kilowatts at the Beauharnois plant, are of such temporary character and small magnitude that the provision of any replacement capacity would not be justified *** (p. 11).

At our request the Chicago Bar Association made a study on the legality of diverting water from Lake Michigan at Chicago. The report and opinion of the Chicago Bar Association finds among other things that the 1909 treaty between the United States and Canadawhich treaty, insofar as this lake diversion is concerned, is still in full force and effect, and has not been changed-guarantees us the unilateral right to such diversion for sanitary purposes.