shipping public. The undesirable impact of this ceiling would be obvious.

Shippers would be forced to pay higher transportation rates and invest considerable

sums in additional cargo handling equipment, storage facilities and even rail cars.

Service would deteriorate because the rails would not be faced with any significant

competition.

What is the economic capacity of Lock 26? Given an agreed theoretical capacity

of about 75 million tons annually, I submit it is around 90 per cent of that figure

or 67.5 million tons. This allows for such factors as the seasonal flow of commodities,

repairs and maintenance to the locks, ice conditions during the winter months, demands

on the locks by recreational craft, interference factors when tows are using both

chambers simultaneously, high water flows and outdrafts during the spring.

Now that we have differentiated between economic and theoretical capacity,

let us look at the historic and projected traffic growth at Locks 26 and translate

these into delays. As can be seen from Chart I, increases on a trend basis have been

steady, particularly because of increased exports of grains and soybeans, which in recent

years have been defie.

For the ten year period ended December 31, 1976 tonnage grew at an annual compounded

growth rate of 4.7 per cent. Moreover, tonnage for 1976 was up 3,400,000 tons or 6.1

per cent over 1975. While 58 million tons passed through Locks 26 in calendar 1976,

60 million tons passed through for the twelve months ended June 30, 1976.

The Department of Transportation "Interim Report of the Replacement of

Locks and Dam 26" to this Committee issued in March, 1977 examined traffic

projections of the Corps of Engineers and various studies conducted on the

question of capacity. We take great exception to both the methodology and the

conclusions of DOT in these two areas. The Report does little to provide to this

Subcommittee and the Congress necessary information and conclusions for reasoned

decision making.

Looking again at Chart I, I direct your attention to the three extensions

in the upper right hand corner. The vertical axis denotes tonnage while the

horizontal axis denotes time. The top extension is based upon a continued compound

growth rate of 4.7%, the historic rate for the past ten years. Should this rate be

sustained, we will reach a capacity of 67.5 million tons by the year 1980. The second

extension projects tonnage growth at a rate of 2.9%, putting us to the level of

economic capacity by 1982. DOT and the Corps used 2.9% in their analysis. The

third and lowest extension represents a compounded growth rate of 2.0%. Even this

low rate will generate total tonnage equal to economic capacity by 1984.

The DOT Report is most misleading in its summary, wherein under the heading

"Principal Conclusions" it states flatly that "As a matter of economics, there is

no requirement for early action on a 1200 foot lock. Review of the traffic

projection and of the capacity question leads to the conclusion that existing

capacity will suffice at least until 1990. The whole question of the desirable ·

level of capacity on this waterway system should be the subject of a major and

extensive study of the whole system. There is ample time in which to conduct such

a study."

This conclusion contradicts itself for one simple reason which DOT never

mentions in its Report. It will take eight to ten years to construct a new dam

and a single 1200' lock assuming full funding and no delays from weather and

other possible problems. Adding additional time needed from today to the start of

actual construction, 1990 may well be the earliest date for completion.

Let us not

forget either that the 1990 DOT date is based upon largely false assumptions and

methodology.

Chart II indicates the relationship between tonnage and traffic delays, with

the vertical axis representing delay times and the horizontal axis representing

capacity. As can be seen, delays are very monimal until capacity is approached.

Then, with very moderate increases in tonnage delays increase very sharply.

We are today beginning to climb the delay curve and will be well up that curve

by the time a new 1200' facility is in place.

In conducting its analysis, DOT examined Corps' forecasts of specific

commodity groups.

White noting that grain shipments through Locks 26 were

far in excess of Corps' forecasts, the Report argued that forecasts of

petroleum, coal fertilizer and other commodities were somewhat less. It

concluded that since grain forecasts had been too low, current levels of

growth in grain tonnage could not be sustained and it was unlikely that other

commodities could catch up to earlier forecasts.

Its interesting to note that another DOT Report "Study of Federal Aid

to Rail Transportation", January 1977. Page II-35 states "Assuming a continuation

of recent high export trends, the Agriculture Department's latest projections for

1985 show that from a 1974 base corn output is likely to increase at an average

annual rate of 4.5% and soybean production could rise at a rate equal to 6.0% per

year." If this nation is to meet its committments abroad in terms of agricultural exports,

it must have a delivery system capable of getting these products to market..

The Report refused to attribute the shortfall in coal, petroleum and chemicals

to a depressed economy, an oil embargo and a succession of mild winters. There is,

indeed, a correlation between intercity freight and economic activity, as noted in

the DOT Report "Study of Federal Aid to Rail Transportation" January 1977, Section II-2:

"Overall economic growth remains a reliable long-term indicator of intercity freight

transport demand." Had DOT checked with several utilities located in the

Upper Midwest, they would have discovered, for example, that demand for

electricity had been much reduced during this period due to mild weather

and the recession.

With regard to future growth of petroleum, DOT failed to check with

Commonwealth Edision in Chicago, whose movements of residual fuel through

Locks 26 will increase from 850,000 tons in 1976 to 2,250,000 tons in 1979.

This increased tonnage must go through Locks 26 because this type of oil must

be heated in transit and does not lend itself to rail or pipeline movement over

long distances.

The inconsistencies in the DOT Locks 26 Report also apply to coal.

While

this DOT Report concludes that significant amounts of new coal will not be forthcoming.

the Section 902 Report on Railroad Aid states on page II-35 that "The latest estimates

of both private industry and government indicate that, spurred by its new role as a

substitute fuel, coal output will nearly double by 1985 to about one billion tons with

the bulk of this gain occurring in the 1980's." Are we to believe the Locks 26

DOT Report or the Railroad Aid DOT Report. This confusion brings into question the

integrity of the DOT Locks 26 Report.

In extending the capacity of Locks 26 to 1990, DOT took into consideration