The Indianapolis times., 1932-09-19
COST is RIDDLE
IN GIANT WATER
ROUTE PROJECT
Where Millions viii Come
From Is Question That
VexeS u. S., Canada.
This is the hfth Of series on possi-
bilities Of the St. Lawrence waterway.
BY WALKER STONE
Times STAFF Writer


North American continent, and
electrify the st. Lawrence river?
Whence will come the money?
Who will derive the benefits, if any,
and who will suffer the losses, if
any?
The first question, on It's face, is
elementary and subject to the sup
posedly exact estimates of en-
gineers. Yet, after years of agita-
ton and almost a decade OF sur
veys, engineers are almost a half
billion dollars apart in the answer.
The joint board of engineers, rep
resenting the Canadian and United
States governments, fixed the cost
at S543,000 900, including several
projects already completed. Inde-
pendent engineers have said the
cost will be almost double that
amount.
No Answer on Money
The second question is one of vital
Importance. particularly at time
when Americans and Canadians are
groaning under tax burdens and
the national treasury Of this coun-
try is radically out of balance. But
as yet no satisfactory answer has
been found
The third question touches the
economic life of 40,000,000 people.
This gigantic project, vast in its
physical proportions, is still more
tremendous in the change it prom
ises-or threatens-to make in COM
merce and industry.
The trade map of continent
can not be rearranged without af-
fecting vitally the lives of all the
people Yet economists are as far
apart as the poles in their opinions
as to probable consequences.
It is to canvass these problems
and many others that the Borah
subcommittee of the senate will
hold hearings on the st. Lawrence
treaty through the late summer
and fall
Cost Estimates Differ
The subcommittee will not have
to start from scratch, but it will
have the more difficult chore OF
separating facts from propaganda
and reconciling conflicting interests
and claims.
The joint board of engineers, in
its report of 1926, estimated the to-
tai cost of the project at $543, ,429 900.
The actual cost should be substan-
TALLY lower under prevailing prices,
said the state department, in its
recent announcement of treaty
terms.
Total cost Will be near $999, 900 900,
said DR.. Harold G. Moulton, presi-
dent of Brookings Institution, in a
book published in 1929 Besides
adding 20 per cent to all the joint
boards estimates, DR.. Moulton in
cluded an estimate of $250000000
as probable cost of improving lake
harbors and port facilities to ac-
commodate ocean vessels.
1T has been estimated that the
values in a single year to the farm
ers alone would equal the capital
cost of the waterway" wrote Secre-
tarv of Commerce Herbert Hoover
in a report to President Coolidge in
1926.
Hoover Claims Benefits
The waterway probably will re-
quire ten years for completion,
during which time normal growth
of traffic in the nation will far more
than compensate for any diversions
from American railways and other
American port facilities" said Presi-
dent Hoover when he described the
signing of the treaty as the re-
demption, of a promise which l
made to the people of the midwest"
But the taxpyers are the class
which must shoulder burdens, in
stead of enjoy benefits, in the opin-
ion of DR.. Moulton.
Computing the capital investment
at $1,000 000,000 and the annual cost
representing interest. depreciation,
maintenance and operation at
$40000,000 the Brookings economist
wrote:
They are to be paid out of the
national treasures of the two gov
ernments-which means that the
taxpayers are to contribute about
$3.50 a ton for the benefit of such
shippers as would use the route
Since grain constitutes more
than 60 per cent of the total traffic,
this commodity may be used to
illustrate the fallacy in the argu-
ment that the Canadian and Ameri-
can people as a whole would realize
great economic advantages from the
st. Lawrence project.
Burden on Taxpayers
The overhead charges of $3.50 a
ton are the equivalent of about II
cents a bushel, The inclusive
cost of transporting wheat over the
st. Lawrence waterway from Duluth
to Montreal would be cents-the
actual water rate-plus IL cents
subsidy contributed by taxpayers, a
total of about 16 cents bushel.
Existing wheat rates average 9
cents a buShel from Duluth to Mon
treal, and from Chicago to New
York about 113 cents bushel. Re-
ductions in grain rates would be, at
the most 4 cents a bushel.
Thus, to effect reduction of 4
cents bushel in the'cost of moving
grain, taxpayers in general would
have to contribute approximately II
cents a bushel.
The conclusion therefore is
inescapable that the proposed 81
foot navigation project can not be
justified on economic grounds"
DR.. Moulton's arithmetic and
economics were ridiculed by pro-
ponents of the waterway. But he
could make much stronger argu-
ment now. The freight on a bushel
Of grain from Duluth to Montreal
was 9 cents in 1929, but it has been
about half that this season.
Operators of Great Lakes vessels
say ocean vessels could not compete
with present rates.