oing to have to leave, otherwise I would have stayed throughout he balance of your testimony; but I think you would be the first agree that the congressional action on the Northeast corridor estions of railroads were also highly politically resolved.

Mr. TAYLOR. Yes. If you mean the entire Northeast Con Rail berea. yes.

Senator MCCLURE. They weren't simply an analysis of transporation needs. They were also involved in a broader context of reSonal economic impact, social values, and political influence. the Mr. TAYLOR. That is exactly the point, Senator. The aid which timately was required to reconstruct the rail system in the Northeast, in my judgment, was largely brought about by a piecemeal evelopment and subsidization of other transportation systems in area until we had an overbuilt system, but an area which could sot live without a rail system. That is why Con Rail is where it is. bhat is why the U.S. Government has given it the kind of support rice did.

1

What I am asking you is to plan ahead so we don't have to epeat that seriatim exercise in the Midwest.

Senator DOMENICI. Mr. Chairman, before we go to the next witlet me make a few observations with the present witness. If I derstand, you are suggesting that we not tie the user charges to eks and dam 26 authorization. You use the words that we ought separate them in our minds. Let me tell you how I feel about that. Ithink if we separate them, user charges are going to be forever our minds. Nothing is going to happen to them. You have to ppreciate the political implications there and the opportunities at are presented. You are aware of them.

I haven't made up my mind about locks and dam 26, but I have tard plenty of testimony over the past 8 or 9 months about it. On the issue of competition, what has happened, I would like to are with you and see if you agree, the Congressional Budget ice has made an analysis of what has happened to the modes transportation since the year 1940, that being the year when a ther special emphasis began to occur in both highways and inland

aterways.

In 1940. according to this summary, rail was 63 percent of the affic in this country. Trucks were 10, and rivers and canals were I will just jump to 1960. Rail was 44, truck was 21.8, and the vers had come up threefold, they were now at 9.2. If we carry at over to 1974, rail is down to 38.8, truck is not up much, it is 23: but rivers and canals were up now again to 11.8. I think that what you have been telling us in your general statement. I would also like to place in the record an excerpt from the Interate Commerce Commission White Paper on Mergers. I would just ad a portion of it. They concluded that the railroad industry as suffered a substantial adverse impact from postwar imports of ublic funds to other transportation needs.

They continue on, saving the construction of primarily highways, and so forth, and the improvement of inland waterways has had a gative impact on the railroad system. The investments have pro

duced a diversion of traffic away from the railroads, reducing th share of transportation revenues.

They conclude, in addition, a reduction in profit margin on t retained rail traffic occurred as these new facilities were paid f with public money. Lower transportation costs and improved ser ices afforded may have had socially desirable results, but becau railroad competitors or various portions thereof do not fully p for the economic costs incurred by these new improved facilities distortion has been introduced into the allocation of transportati resources and accordingly, the negative impact on railway earnin has been accelerated.

Senator GRAVEL. Thank you.

Mr. DEMPSEY. My next witness is Thomas S. Carter.

STATEMENT OF THOMAS S. CARTER, PRESIDENT, KANSAS CIT SOUTHERN RAILROAD

Mr. CARTER. Thank you.

Gentlemen, my name is Thomas S. Carter. I am president a chief operating officer of the Kansas City Southern Railway Co pany. I have filed for the record a formal statement. I will not ta the time to read it; but I would like for it to be considered. ( p. 677.]

We are a small southern railroad. We want to stay that w During the last 311⁄2 years, I have not been able to pay a divide to my stockholders. Rather, I put every dollar I could generate b into the maintenance of the right-of-way. It is a bit difficult for to meet competition by charging less for the movement of produ to the market, simply because someone else I am here talk about the taxpayers is paying for maintenance of their righ of-way.

In my paper I have drawn four conclusions. I will hit those v briefly and then pass the mike down to my friend. First; I ask t the subsidization of the waterways be terminated. I believe v seriously that that should be done.

Second: I am asking that locks and dam 26 be repaired rather t relocated, rebuilt and enlarged. Third, I am sorry that Sena McClure is not here to hear this; but I think that considerat should be given-this is outside the two bills we are talking ab but certainly consideration should be given to the removal of strictions against the railroads to operate contract as carriers.

Our competitors do have these rights. It is a rather difficult ject to explain briefly; but they do have those rights. I think haps that would answer part of the question. Fourth: I bel very strongly and I so recommend that a user charge be imp on the waterways.

If there are no questions, that is all I have.

Senator GRAVEL. Thank you.

Please proceed.

Mr. DEMPSEY. Our next witness is Mr. William Mahoney, appears on behalf of the Railway Labor Executives Associati

STATEMENT OF WILLIAM MAHONEY, RAILWAY LABOR
EXECUTIVES ASSOCIATION

Mr. MAHONEY. Mr. Chairman, Mr. Chamberlain asked me to express his regret that he couldn't be here himself this morning as it is imperative that he chairs the opening bimonthly meeting of the Labor Executive Association this morning. He has submitted a Statement which we ask to be placed into the record as his statement. I shall not read it. (See p. 682.)

I would only like to state that in this statement, Mr. Chamberlain, on behalf of the Railroad Labor Executives Association, expresses his opposition to those organizations which approve reconstruction of a new locks and dam 26; but, of course, does not oppose the repair of the existing locks and dam.

Also, the Railroad Labor Executives Association fully supports a 100-percent user charge arrangement on the users of the waterways, the navigable waterways of the country. We feel very strongly about this, about both of these points.

We feel that to use the statistics of the Corps of Engineers, although I must say that I have a little difficulty with statistics because I think statisticians often lean on them like a drunk on a lamp post, more for support than illumination; and in this paracular record, I have seen more statistics that I have ever looked at. In any event, the Corps of Engineers feels that railroad jobs will be lost at a rate of 4.5 for every barge job created. We oppose that. It seems inconsistent to us to pass the Quad-R Act which is in aid to the railroads on the one hand, and then you have the ubsidized waterway system which is not only subsidized, but an>ther $400 million is put into it to expand it. You take away from the railroads, on the other hand.

For those reasons, the Railway Labor Executives Association is pposed to reconstruction of locks and dam 26 and supports 100percent user charge.

Thank you.

Senator GRAVEL. Thank you.

Our next witness?

Mr. DEMPSEY. Our next witness is Mr. Fred McKim, Manager of the West Bend Elevator Company, West Bend, Iowa.

STATEMENT OF FRED MCKIM, GENERAL MANAGER, WEST BEND ELEVATOR CO.

Mr. McKIм. My name is Fred McKim and I am general manger of the West Bend Elevator Company. This company is a armers cooperative company. There are about 2.500 members. We mainly do grain business. We have a supply business and we also ave fertilizer chemicals as well as feed. I will not read my statenent today, but will submit it for the record. (See p. 688.)

Briefly, I will state our position as a company. We support the waterway system, of course, we support all modes of transportation. america needs all modes of transportation; but we do not feel that

they should be subsidized to the extent that they should not have users fee of some type.

We recommend 100 percent, but many times we cannot achi 100 percent; but we would be happy with any sort of user chap that would recover some of the taxpayers' money.

Our shippers along our segment of Iowa have been concer about the railroads for about 5 years. Basically, this came ab when the Rock Island was becoming financially insecure and ab to go bankrupt. So we proceeded to raise half a million dollars. shippers, to advance to the Rock Island to upgrade a railroad tr that goes through about 45 communities.

From that time we have raised now $22 million and lent it the Rock Island, interest free, on a repayment schedule. We h negotiated a contract with the Rock Island for an interest free of $134 million. This proves that the farmers and our cooperat need the railroad.

I am not here to be a railroad advocate to the extent that t are all nice guys. There are many railroads that are bad and h been bad and probably will be bad in the future. We are only ing to say that we need railroads very badly in Iowa. I think consumers need the railroads real bad.

As far as the user fees in the Gulf, I am sure that India, Rus and China will probably pay quite a few of these user fees th selves because they have to pay for the additional cost of grai

If we could get a better system of railroad transportation, sibly the rates to other parts of the United States would be be and the consumer might profit on a user fee on the waterway I will be available for questions, but that is the extent of statement.

Mr. DEMPSEY. Our final witness is Mr. William A. Wahler, P ident of Wahler & Associates.

STATEMENT OF W. A. WAHLER, PRESIDENT, WAHLER &

ASSOCIATES

Mr. WAHLER. I am founder and president of Wahler & A ciates, a consulting engineering firm specializing in dam enginee throughout the world since 1960.

My testimony has to do with the potential for repair of 1 and dam 26. I would like to summarize the conclusions that have come to that our plan is based on proven, feasible, safe reliable concepts.

The basic elements of the plan have been submitted in the and have been reviewed by the OMB consultant teams, McCa and Strutten. My interpretation of their opinions are that scheme is feasible; that there are several areas of concern to checked out and taken care of in the final design; and that per the costs that we had estimated were on the low side.

We have looked further at this matter. We will provide the tail of our concept for review by all concerned during the next w With regard to the dam, there are four concerns that have repeatedly considered. I think the most serious one is the s

downstream from the dam. The U.S. Corps of Engineers has proposed a solution to this problem on the basis of prudency that it be taken care of now, whether or not the dam is to be replaced, as a necessary measure. We concur in this.

The second concern in our order of priority is the voids beneath some elements of the dam and stilling basin structure. These voids have occurred perhaps many years ago. They may not be of a serious consequence unless we have an unfavorable experience with. the sheet pile walls on the upstream or downstream portion of the dam.

However, if they were to malfunction or fail, this could then be very serious matter. So we agree that these should be taken care of. They have to be taken care of. We believe, however, that the probability of occurrence of an unfavorable circumstance requiring this improvement to preclude disaster is as serious today as it would be tomorrow, as it would be sometime in the future.

In other words, it is not a progressively deteriorating circumstance; but, rather, an unfavorable condition which could be an imminent hazard, a hazard that may or may not occur; but if it did, would be a very serious one. Therefore, we believe that this should be repaired; but this is a repair in order to keep the dam operable during the next year as well as the subsequent years. There is no degree of repair that I could see that one would do at a lesser cost for a 10-year life as contrasted to attempting a permanent repair.

Concern number three with regard to the dam, is deterioration in the stilling basin. We believe that this is a real deterioration. We believe that it can be taken care of effectively and economically and that it is as have been the two previous concerns, of current concern, and that if the integrity of this stilling basin is lost, that the integrity of the whole structure may be in jeopardy as a result thereof.

Therefore, it would be imprudent to put off at least the repair of the cavities that are in this wall. We believe, for example, that this can be done on its own for about $1 million.

We believe, however, if you do that in conjunction with what might not be necessary for a 10-year life, but would be necessary for a 50-year life-that is to put an epoxy coating or something of that order on the surface to preclude further cavitation and deterioration in the future-that as a separate item might cost in excess of $2 million.

However, if we put these two together and work it with a movable cell system in the dry, that both could be done for about $3 million or not greatly more than the emergency measures would be required.

Senator DOMENICI. Doesn't the Corps of Engineers plan to do the first part, even if locks and dam 26 is authorized?

Mr. WAHLER. I hope so. However, I cannot answer that question

because

Senator GRAVEL. Let me speak to that.

I wonder if you could tell us the exact nature of the engineering work that you did do?