segment or per-capacity of loaded or unloaded cargo vessels over a given segment of the River, which costs would allegedly be shared by all commercial users of that segment, the grossest of inequities would result, as Dreyer and Goedecke is the only "commercial user" of the River, and in this case, there would be no other user with which to share the cost.

It is easy to determine, assuming our estimate of $2 million as an annual expense for maintenance and repair is correct, and that Dreyer and Goedecke, Inc. was required to pay that entire cost, a tax of $2.00 per ton would be imposed. Although the barging of sand is the most economical method of transportation for the area in question, Dreyer and Goedecke could not possibly meet the competition if a tax of this magnitude, based on charges per river segment, was imposed. The obvious result would be the necessary liquidation of this Company's business, as well as the elimination of barge traffic on this River. Dreyer and Goedecke presently establishes the most competitive rate for the purchase of sand in this area. Without barge transportation, this competitive force would be eliminated to the obvious disadvantage of the consumer in this area.

I am confident that there are many rivers similar to the Kentucky River where there are a very limited number of users to share in the cost of maintaining that particular channel. Segmental charges as authorized by this legislation would have the ultimate effect of eliminating river transportation on these small rivers. In addition, barge transportation provides the cheapest method of transporting large volumes per gallon of fuel energy used. At a time

when the conservation of energy is a paramount problem, we hope Congress would not allow a tax to be imposed which would jeopardize this mode of

transportation.

Dreyer and Goedecke, like any other taxpayer, opposes any

additional imposition of taxes; however, it does recognize that it is sometimes inevitable that taxes must be imposed to sustain the furnishing of services by governmental agencies. If it is the will of Congress that some type of tax be imposed on the users of our waterways for purposes of the maintenance thereof, then, so be it, but it is of extreme importance that this Subcommittee, Congress, and the Secretary of Transportation have a thorough understanding of the detrimental effect "segmental charges" would have on the commercial

users of small rivers.

In order to sustain barge transportation on small rivers as a competitive mode of transportation, "user charges" must be based on a fuel tax which would enable these businesses to operate on a competitive basis. We recognize that the legislation, as proposed, allows the Secretar

of Transportation to promulgate regulations for the imposition of this tax, and hopefully, in promulgating those regulations, he would remove these inequities for small rivers; however, we would sincerely hope that Congress would establish guidelines in the legislation itself which would prohibit the imposition of "user charges" based on anything other than fuel taxes.

We will greatly appreciate your attention to a matter of survival

for this small Company.

Senator MCCLURE. The hearing is adjourned.

[Whereup, at 5:10 p.m., the subcommittee adjourned, to reconvene at the call of the Chair.]

APPENDIX A

DEPARTMENT OF TRANSPORTATION INTERIM REPORT

THE REPLACEMENT OF

ALTON LOCKS AND DAM 26

(Single 1200' Lock Proposal)

An Interim Report of

the U.S. Department of Transportation

to

the Subcommittee on Water Resources of

the Senate Public Works Committee

March 1977

VI. Upper Mississippi and Illinois Waterway River
System Study..

Appendix A: Lock Capacity

Appendix B: Rail Impact

Page

SUMMARY

The continuing debate over the proposed replacement of Alton Locks and Dam is the immediate focus of the much broader issue of the future capacity of the waterway system on the upper Mississippi and Illinois Rivers. This 120-day study makes no effort to deal with this or other broader questions such as user charges.

The study is an economic evaluation of the desirability of constructing a single 1200-foot lock at Alton. It concentrates on three aspects of this question:

As a matter of economics, there is no requirement for early
action on a 1200 foot lock. Review of the traffic projections
and of the capacity question leads to the conclusion that
existing capacity will suffice at least until 1990. The whole
questions 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.

As a matter of engineering, the Corps of Engineers asserts
that replacement or rehabilitation of the existing facility'
is required at this time. If this is indeed the case, it is
very likely that a single 1200-foot lock would be constructed
as part of such an effort at relatively low additional cost.
If so, it would be economically desirable to construct such a
1200-foot lock since the capacity of the existing facility
will almost certainly be reached in this century, and 1200
foot locks are already in place at the dams above and below
Alton. There is considerable controversy surrounding the
engineering aspects of this matter, however. Until these
questions are satisfactorily resolved, DOT cannot submit a
final report recommending an appropriate course of action.
The Department will submit such a report as soon as we
have satisfactory answers to the engineering questions.

Principal Findings

Impact of a Single 1200-foot Lock on Railroad Revenues:

The impact of the proposed single 1200-foot lock on railroad
revenues does not appear to be significant.

o A single 1200-foot lock at Alton, Illinois will not cause significant diversion of existing rail traffic to the waterways.