generated with coal only at 6.98 mills total cost, or a net difference of 3.98 mills. There is no section of the United States that needs the injection of new lifeblood in the form of cheaper power into its industrial body more than the areas within the distribution limits of St. Lawrence power. New England industry has suffered grievously in competition with industry in the South in particular, and cheaper electricity in the South has been a vital factor in this shift. 21. Figures taken from the 1951 annual report of the Federal Power Commission on monthly electric bills in cities of 50,000 or greater population, reveal that typical residential bills reduced to a 250-kilowatt-hour basis for the 6 New England States and New York State combined averaged $8 compared with an average of $5.31 for the 4 lower power cost States of Tennessee, Nebraska, Washington, and Oregon, and an average of $6.95 for the United States as a whole, including the New England States. Thus New England pays 50 percent more for energy than the 4 low power cost States and more than 15 percent more than the average for the rest of the country. Since electric energy plays such a vital part in cost of modern industrial production, and of living, it is obvious that a 50-percent handicap in this respect is of great importance to the welfare of this area. Cheap St. Lawrence power would doubtless play a significant role in a revival of industry in the distribution area of the project. 22. Although we have a heavy Grange membership that would benefit by a reduction of electric rates in the distribution area of the St. Lawrence project, our major interest and the major benefits to farmers would come from the seaway and cheaper transportation over the entire 14-State area, both outbound and inbound tonnage. We would like to appraise this beneficial aspect of the project in more detail for export grain. 23. To substantiate estimates of potential grain traffic over the proposed St. Lawrence seaway, it is necessary to examine two basic factors. First, does the grain-production potential of the region tributary to the Great Lakes produce sufficient grain to warrant this estimate; secondly, will the rate that is probable over this waterway be sufficiently attractive to draw the grain traffic to this route? 24. Reference to the appended table No. 1 will show that the St. Lawrence tributary agricultural area produces over 60 percent of the total wheat produced in the country or roughly around 700 million bushels out of an average annual total for the Nation of 1.1 billion bushels for the 10-year period from 1941-50. Exports have averaged annually around 200 million bushels or around 12 million short tons. The recently negotiated International Wheat Agreement assigns us an export quota of 270 million bushels. If the St. Lawrence area exports its proportionate share or 60 percent of the 200 million bushels this would mean around 120 million bushels or 7.2 million tons exported from the St. Lawrence area. This is, conservatively, potential export tonnage for the seaway. 25. If wheat production can be expanded by 25 percent as we have estimated, this 7.2 million tons is doubly conservative and is not an unreasonable figure for future potential exports to a hungry and rapidly growing world population from this area. It forms the basis for a reasonable probable estimate of future wheat tonnage that might move from the area into export. It will be noted that this takes no account of other potential grain tonnage and of Canadian grain tonnage. In other words, it takes into account the reasonable basis for export tonnage of wheat only within the 14 States tributary to the St. Lawrence in the United States alone. It is a view of the potential export tonnage and not an estimate of how much of it that would likely move over the seaway. To focus on the figure again, it has amounted to 7.2 million tons for export during the 10year period, and if this were to be expanded by 25 percent, the future probable expanded output in the area, it would amount to 9 million. tons. 26. Now let's examine results of previously estimated potential tonnage of grain both American and Canadian that is considered probable future seaway tonnage if the seaway is developed. The United States Department of Commerce has twice reported estimates of from 612 to 1112 million tons of all grains with little or no consideration for expanded output from the area. Recent access to entirely independent estimates made by Canadian Department of Trade and Commerce arrive at a probable tonnage as follows: Wheat, 6 million tons; other grain, 2.2 million; and flour and mill products, 2.2 million, or a total tonnage of 10.4 million (see table 2). A third estimate given by the Great Lakes-St. Lawrence Association estimates a total of 10 million tons. 27. When one takes into consideration that these estimates do not take into account expanded future output from this the world's most productive grain area, that research is rapidly expanding potential per-acre yields, that this area is the world's premier area for probable use of improved farming methods, and finally that all the facts indicate, as yet, that the race between food supply and mouths to feed is being lost to the hungry mouths, one gets a combination that inevitably leads to a powerful stimulus to a greatly expanded potential grain tonnage from the area in the near future for the seaway. 28. I shall try to reduce the advantage of this movement of grain in terms of wheat to a more objective basis for farmers in the St. Lawrence tributary wheat-producing area. Tables No. 3 and No. 4 present transportation and handling costs per bushel of wheat from interior points in the hard winter wheat-producing area (Salina, Kans.) and the hard spring wheat area (Mandan, N. Dak.). The latter rates are used also as a basis for estimating a comparable rate from Mandan to Duluth and to Montreal over oceangoing steamers via the St. Lawrence seaway. (See items 7 and 8 of table 4.) It will be noted that the estimated rate to Montreal is about 5 cents per bushel less than the cheapest alternative present rate from Mandan to Albany by barge and to export. Due to the fact that the Albany rate is in part canal barge rate from Buffalo to Albany the saving of 5 cents to Montreal is a minimum and would more likely be 7 cents to 8 cents per bushel. This saving would in large part be reflected back to farm wheat prices, since normally wheat is on an export basis and this would mean world prices set the domestic price level. 29. But mere cents of advantage in comparative freight rates do not reflect all the advantage that would accrue to the St. Lawrence seaway as a transport means of grains. The capacity for handling large volumes of grain over the presently most competitive rate facilities is greatly restricted compared with the seaway. Consequently, the relative gains would be greater to the inland area than the mere differential in rates indicates. 30. A conservative estimate of wheat yields per acre in the tributary area is 25 bushels or a saving of from $1.25 to $2 per acre at the 5- to 8-cent estimated range, which when capitalized as an added income at 4-percent interest would amount to a capitalized value of from $30 to $40 per acre of wheatland. 31. These figures are not presented as an accurate figure of net value that would be added to farmland values in the area, but as illustrative of how all-pervading and how significant the value of the St. Lawrence seaway can be to farmers in the tributary area. Even if one could safely attribute a capitalized value of half that indicated for cropland only the added capitalized benefits to the 227 million acres of cropland of the area is stupendous-over $3 billion. 32. Obviously, whether or not such capitalized values will reflect themselves back into the agricultural economy of the region, will depend on whether or not the wheat enterprise occupies a dominant position among the other crops of the area, whether or not export advantages can be absorbed somewhere in market channels after the commodity leaves the farm, and other complicating factors. But we are firmly convinced that advantages of this great seaway project will have profoundly valuable effects on the agriculture of the region— effects that are so far reaching and all-pervading that it is impossible to catalog and appraise them. 33. Now that we have shown the benefit to American agriculture by the saving this development will bring in grain-transportation rates, let us speculate a bit. As a matter of fact, this is not a dream but a serious thought now being explored. Some 484 miles east of Montreal on the St. Lawrence River is a little town called Seven Islands. It will be the terminus of the railroad now being built to transport Labrador ore to the river and transshipped from there by water. It is not hard to imagine the construction, in the near future of huge grain terminals at this same point for the transshipment of grain from lake freighters to ocean carriers. This would permit on grain-export movements 1 long water haul of 1,856 miles, from Duluth to Seven Islands, with but 2 handlings, 1 the loading at Duluth, the other the unloading at Seven Islands. This would be transported in huge lake carriers over 700 feet long and carrying 20,000 tons or upward. Also, remember, this same lake carrier could then turn around and load iron ore for the Midwest steel mills, thus giving it a full payload of bulk commodities both ways. Is it hard to imagine what this would do to grain-transportation rates? It is entirely probable that this same 45 cents or 46 cents we have estimated for transport from Duluth to Montreal would prevail from Duluth to Seven Islands, with a resultant reduction in the overseas rate from Seven Islands abroad due to the fact that the haul would be almost 500 miles less. 34. In conclusion, the National Grange urges this committee and, in turn, the full committee as well as the Congress of these United States to authorize without delay participation of our country with Canada in the development of this project. All circumstances considered we believe the Wiley bill is the best feasible proposal before the Congress. Proof has been given to you, we believe, that this is in the interest of national security, the future economic stability of our country to say nothing of the benefits to the 60 million Americans who will be directly benefited-and all this, mind you, at no cost to the United States taxpayer. This is the real import of the proposition that is before the Congress. In all sincerity, it is so convincing to us that it is inconceivable that the unjustified opposition of the past two decades will now prevail. TABLE NO. 1.-The trend and position of inland agriculture in the Nation's agriculture, 1939-491 1 Based on U. S. Census and U. S. Department of Agriculture_statistics. The States included are Ohio, Indiana, Michigan, Illinois, Wisconsin, Minnesota, Iowa, Missouri, Kansas, Nebraska, South Dakota, North Dakota, Montana, and Wyoming. TABLE 2.-Canadian Department of Trade and Commerce, Economic Research Division, estimate of potential traffic in the canal systems of the St. Lawrence Waterway TABLE NO. 3.-Wheat for export: Estimated transportation and handling costs per bushel, estimated interior points to ports, August 1952 Country elevator (area III): I. SALINA, KANS., TO NEW ORLEANS, VIA BARGE FROM KANSAS CITY, MO. Elevating, storage, weighing, inspection, insurance, etc.. Railroad freight, Salina to Kansas City, Mo.. Weighing and inspection at Kansas City, Mo. (in). Elevating (in and out) at Kansas City. Weighing and inspection at Kansas City (out) Transportation, by barge, Kansas City to New Orleans- Total cost per bushel____. I-A. SALINA, KANS., TO NEW ORLEANS, VIA BARGE, WITH 11 Country elevator (area III): Elevating, storage, weighing, inspection, insurance, etc.. Railroad freight, Salina to Kansas City, Mo Weighing and inspection at Kansas City, Mo., terminal (in). Total cost per bushel_. |