(3) That the tolls shall provide for the Corporation revenues sufficient to defray the cost to the Corporation of its operations in carrying out the purposes of this joint resolution, and such costs shall include (A) the cost of operating and maintaining all the works under the administration of the Corporation, including all operating costs of the Corporation and such reserves as the Corporation may deem necessary and proper; (B) payment of interest on the debts and obligations of the Corporation; and (C) amounts sufficient to amortize the principal of the debts and obligations of the Corporation over a period not to exceed fifty years. (c) Any rates of charges or tolls established under this section shall not be effective until approved by the President. Without objection, there are a few telegrams here from two governors which I ask unanimous consent to place in the record, one from the Governor of Minnesota, Gov. Elmer Anderson, and the Governor of my own State of Michigan, Governor Williams." There being no objection, the telegrams will be included in the record. Without objection, reports from the State Department, the Department of the Army, Federal Power Commission, the Department of the Interior, and the Bureau of the Budget will be inserted in the record at this point. (The telegrams and the reports from the Departments are as follows:) Hon. GEORGE A. DONDERO, Chairman, House Public Works Committee, ST. PAUL, MINN., June 9, 1953. 1414 New House Office Building, Washington, D. C.: Urgently recommend adoption of House Joint Resolution 104 authorizing United States participation in construction of St. Lawrence seaway. This measure, assuring a self-liquidating means of transportation between ocean ports and the Great Lakes, will afford high degree of economic stability to Minnesota and neighboring States. The people of Minnesota feel this long-delayed project requires early authorization. Congressman GEORGE DONDERO, Chairman, House Public Works Committee, C. ELMER ANDERSON, LANSING, MICH., June 10, 1953. 1414 New House Office Building, Washington, D. C.: Michigan strongly endorses House Joint Resolution 104 as the best means to secure the construction of the Great Lakes-St. Lawrence Seaway and power project. I firmly believe that the passage of this legislation will add to national security and will contribute to the economic stability of the entire Midwest. Foreign shipping today possesses a monopoly in the Great Lakes-overseas trade. The shallow draft and limited length of existing St. Lawrence channels effectively prevent the employment of large American bulk carriers and high-speed transports. The failure of this resolution will abandon this trade to foreign vessels. It will prevent a growth of American shipping and the direct transfer of Midwest agricultural and industrial products to the countries of the world. House Joint Resolution 104 is true economy. It provides for a self-liquidating project and is an investment in the economic future of America. Michigan needs the iron ores of Labrador and an open door to the markets of the world. I most strongly urge the immediate passage of this urgently needed legislation. Gov. G. MENNEN WILLIAMS. JUNE 19, 1953. Hon. GEORGE A. DONDERO, Chairman, Committee on Public Works, House of Representatives, Washington, D. C. DEAR MR. CHAIRMAN: In accordance with the understanding reached during my recent testimony on behalf of the administration before your committee on the St. Lawrence-Great Lakes seaway project, I wish to submit for the record the following additional material: 1. APPLICATION OF BOUNDARY WATERS TREATY OF 1909 In response to the request of Congressman McGregor for further information on this subject, I call attention to the language of the 1909 treaty respecting navigation, rules, regulations, and tolls, reading as follows: "ARTICLE I. The High Contracting Parties agree that the navigation of all navigable boundary waters shall forever continue free and open for the purposes of commerce to the inhabitants and to the ships, vessels, and boats of both countries equally, *** and without discrimination to the inhabitants, ships, vessels, and boats of both countries. "It is further agreed that so long as this treaty shall remain in force, this same right of navigation shall extend to the waters of Lake Michigan and to all canals connecting boundary waters, now existing or which may hereafter be constructed on either side of the line. Either of the High Contracting Parties may adopt rules and regulations governing the use of such canals within its own territory and may charge tolls for the use thereof, but all such rules and regulations and all tolls charged shall apply alike to the subjects or citizens of the High Contracting Parties and the ships, vessels, and boats of both of the High Contracting Parties, and they shall be placed on terms of equality in the use thereof." [Italic added.] Articles III and following vest in the International Joint Commission jurisdiction respecting boundary-waters changes or uses "affecting the natural level or flow of boundary waters on the other side of the line." The act of the Canadian Parliament entitled "An act to establish the St. Lawrence Seaway Authority" provides: "10. The Authority is incorporated for the purposes of— "(a) acquiring lands for and construction, maintaining, and operating all such works as may be necessary to provide and maintain, either wholly in Canada or in conjunction with works undertaken by an appropriate authority in the United States, a deep waterway between the Port of Montreal and Lake Erie; and "17. Where the works have been constructed and are maintained and operated by the Authority to provide, in conjunction with works undertaken by an appropriate authority in the United States, the deep waterway mentioned in section 10, tolls may be established pursuant to sections fifteen and sixteen or by agreement between Canada and the United States and, in the event of such an agreement, shall be charged by the Authority in accordance with directions given by the Governor in Council." [Italic added.] This act further provides in section 28 as follows: "28. Nothing in this Act affects the operation of The International Boundary Waters Treaty Act, chapter twenty-eight of the statutes of 1911." The International Boundary Waters Treaty Act gives effect in Canada to the treaty of January 11, 1909, which is quoted above. In the applications which were filed on June 30, 1952, by the United States and Canada to the International Joint Commission, it was requested that both applications be considered as in the nature of a joint application for approval of the construction of the works to be jointly undertaken by an entity to be designated by the Government of the United States and an entity to be designated by the Government of Canada. The application of the United States provided in section 13 as follows: "13. In submitting this application, the United States expressly reserves all its existing rights in the Great Lakes and the St. Lawrence River including among others the rights mutually extended to the United States and Canada under the Boundary Waters Treaty of 1909 as follows: to undertake and carry on governmental works, in the International Rapids Section or elsewhere in boundary waters, for the deepening of channels and other governmental works for the benefit of commerce and navigation, provided that such works are wholly on its own side of the line and do not materially affect the level or flow of the boundary waters on the other; to enjoy free and open navigation of all boundary waters and of all canals connecting boundary waters, now existing or which may hereafter be constructed, subject to any laws and regulations of either country within its own territory, not inconsistent with such privilege of free and open navigation; and to adopt rules and regulations governing the use of such canals within its own territory and to charge tolls for the use thereof, provided that all such rules and regulations and all tolls shall apply equally alike to the inhabitants and vessels of both countries and that they shall be placed on terms of equality in the use thereof." [Italic added.] (H. Doc. No. 528, 82d Cong., 2d sess., p. 8; hearings of Subcommittee of Committee on Foreign Relations, United States Senate, 83d Cong., 1st sess., on S. 589, p. 105-106.) This expresses clear intent to reaffirm the equal-treatment principle so firmly embedded in the underlying treaty and leaves room for full cooperation under United States participation. The collection of tolls on an equitable basis to pay for improvements constructed in boundary waters is consistent with both American and Canadian law (Pigeon River Co. v. Cox Co., 291 U. S. 138 (1934); Arrow River & Tributaries Slide & Boom Co., Ltd., v. Pigeon Timber Co., Ltd., 1932 Can. Sup. Ct. 495; V. Hackworth, Digest of International Law 263). Both the proposed legislation and Canadian statutes clearly contemplate definite business-like agreements in advance on the essential elements of mutual participation so far as practicable. Section 3 of House Joint Resolution 104, for example, refers to the "joint report" of January 3, 1941, and to operation and maintenance of such works "in coordination with" Canada. Section 13 (a) thereof directs negotiation of tolls between agencies of the two countries. Section 12 (a) of committee print No. 2 of S. 589, which the administration suggests as an amendment to House Joint Resolution 104, expressly includes within such matters for negotiation, in addition to tolls, measurement rules and division of revenues. Both the American proposal and the Canadian statute contemplate full reimbursement of operating and maintenance costs, and amortization over a period not exceeding 50 years. The State Department advises that in fact a number of facilities of interest to both United States and Canada have been constructed in the past, such as the American locks at the Soo, the Welland Canal, and numerous bridges and tunnels, without specific agreement in advance as to tolls and similar arrangements. In sum, the subject of equitable relationships between the two countries concerning navigation is adequately covered as to fundamentals by the 1909 treaty and as to implementing principles and procedure by the existing Canadian and proposed American legislation. While business-like administration will reduce the various arrangements to definiteness as soon as practicable, no further special intergovernmental agreement as such is necessary in the present instance, because the governing provisions, properly construed, would be sufficient to protect fully the United States interests. 2. DETAILS OF TRAFFIC PROJECTION In the course of questioning by Congressman Auchincloss, I agreed to furnish fuller detail on our traffic estimates. The staff committee working on this problem for the administration considered three recent estimates of the commodity traffic as follows: (1) Canadian Department of Trade and Commerce, Economic Research Division, estimate of potential traffic on the canal systems of the St. Lawrence Waterway (1951) [Thousands of short tons of freight] (2) Estimate of Great Lakes-St. Lawrence Association (1952) (3) Prior Department of Commerce estimate (adjusted, 1952) Total short tons under load--. 10, 000, 000 6, 000, 000 2, 000, 000 20, 000, 000 1, 000, 000 1, 000, 000 5, 700,000 45, 700, 000 Million tons 642-832 252-42 On the basis of these figures and on the basis of an overall engineering check, applicable where water facilities are greatly improved (which proceeded from a minimum computation base of 30 million tons and on an annual increment factor of 5 percent for the first 5 years, 4 percent for the next 5 years, 3 percent for the next 5 years, and 1 million tons thereafter, developing a weighted average tonnage of 61 million), it was concluded that 40-50 million tons would be the reasonable minimum estimate for a 50-year period. Such estimate would be confirmed by the sustained upward economic trends which characterize both our present economy and that of Canada. Under present conditions the Welland Canal could handle such a volume under efficient operating conditions. Further, a minimum average toll of 60 cents a ton, assumed throughout previous hearings to be reasonable, would produce average annual revenues exceeding $24 million, which contrast with estimated operating and carrying charges of $14.6 million. As General Robinson of the Army engineers testified, the seaway could well be expected to be selfliquidating on an even lower basis of tolls, i. e., 29 cents per cargo ton for an average tonnage of 50 million or 31 cents for an average of 45 million tons. 3. CANADIAN SEAWAY PLANS In addition to the above, I wish to point out, in connection with the rail association testimony concerning Canadian obligation to build an all-Canadian seaway, that the administration thoroughly considered this question and concluded that neither the order of the International Joint Commission nor the form of application by the New York Power Authority to the Federal Power Commission constitute any legal barrier to the approval of legislation substantially in the form of House Joint Resolution 104 nor to the carrying out of the joint participation provided therein. If the Congress sees fit to pass this legislation promptly, the Government will be able to proceed with its effectuation immediately upon clearance of the power authorization under the Federal Power Act. The administration strongly urges such course, in the national interest, bearing in mind the inevitability of some action by Canada soon and the great importance to United States security and economic welfare of joint participation correlative with such interest. We are deeply appreciative of the fine hearing accorded by your committee to us and trust that the information submitted herewith will aid the committee in its deliberations on this vitally important matter. Sincerely yours, WALTER WILLIAMS, Under Secretary of Commerce, THE SECRETARY OF COMMERCE, Hon. GEORGE A. DONDERO, Chairman, Committee on Public Works, House of Representatives, Washington, D. C. DEAR MR. CHAIRMAN: This letter is in reply to your request for the views of the Department of Commerce with respect to House Joint Resolution 104, a joint resolution "Providing for creation of the St. Lawrence Seaway Development Corporation to construct part of the St. Lawrence seaway in United States territory in the interest of national security; authorizing the Corporation to consummate certain arrangements with the St. Lawrence Seaway Authority of Canada relative to construction and operation of the seaway; empowering the Corporation to finance the United States share of the seaway cost on a selfliquidating basis; and for other purposes." The proposal would provide for participation by the United States in the construction of a Great Lakes-St. Lawrence seaway with depth of 27 feet in channels and 30 feet over lock sills. United States participation would be achieved through the use of a Government corporation. Tolls for use of the seaway would be fixed by the corporation acting, to the extent practicable, in conjunction with its Canadian counterpart. The proposal directs that such collections be sufficient to cover capital, operating, and maintenance expenses, including amortization over a 50-year period. This Department actively participated in the formulation of the unanimous position of the administration on the St. Lawrence-Great Lakes seaway project, which is briefly summarized as follows: 1. The security and other interests of the United States, taken as a whole, make desirable participation in the St. Lawrence-Great Lakes seaway project, limited to the international section of the St. Lawrence between Lake Erie and Montreal, substantially as provided in S. 589. 2. Participation by the United States should, however, be expressly conditioned on (a) satisfactory assurance that the underlying power project will go ahead, pursuant to appropriate authorization; (b) satisfactory assurance that Canada will go ahead with its part of the navigation project, in cooperation with the United States; and (c) predication of the project on a self-liquidating basis. These conditions are reasonable and consistent with national policy. 3. Participation by the United States now in the construction and operation of a St. Lawrence River seaway would increase its defense advantages to this country, and would in time of emergency assure it of full benefits of joint participation. 4. Participation by the United States now in the project would strengthen our strategic position at all times respecting use of the seaway for transportation of basic materials. 5. Construction of the International Rapids section canals on the United States side would be more economical than construction on the Canadian side and to that extent would result in lower tolls, and because of its design, the American project would constitute in certain aspects a superior navigation facility. 6. The St. Lawrence seaway, Lake Erie to Montreal section, so constructed and operated, can reasonably be expected to be self-liquidating over a projected period of 50 years. 7. Early initiation and completion of the St. Lawrence-Great Lakes seaway project in accordance with our recommendations is in the national interest. In conformity with the views of the Department of the Treasury and the Bureau of the Budget, we suggest that House Joint Resolution 104 be amended to conform to the provisions of committee print No. 2 of S. 589 as approved by the subcommittee of the Senate Committee on Foreign Relations. This Department urges the early enactment of House Joint Resolution 104 if so amended. We are advised by the Bureau of the Budget that it would interpose no objection to the submission of this report and that House Joint Resolution 104, if amended as suggested above, would be in accord with the program of the President. Sincerely yours, SINCLAIR WEEKS, Secretary of Commerce. |