The cost of the improvement is estimated at $1,069,000 of which $619,000 would be Federal and approximately $450,000 would be non-Federal for modification of berthing areas. No changes would be required in existing navigation aids. Annual benefits, according to the district engineer, are estimated at $226,000, consisting of transportation savings in bulk and general cargo commerce. The benefit-cost ratio is 4.7. Thorough consideration over an extended period has been given to the project by the Corps of Engineers. As you know, it has received a favorable recommendation of the Board of Engineers for Rivers and Harbors. ONTON AGON HARBOR, Mich. Mr. BLATNIK. Congressman John Bennett, of Michigan, has the Ontonagon Harbor in Michigan, of which he is the sponsor of a project. Do we have the fact sheets on the Ontonagon Harbor here? Mr. McFall. While we are getting that, might I ask a question on the benefit-cost ratio? A routine question ? Mr. BLATNIK. Yes, Mr. McFall. Mr. McFALL. Colonel Goodsell, you described the benefits. In the cost you figure the costs over a 50-year period, including interest and amortization, and the annual cost of maintaining the project in the condition you would place it in. 'Is that correct? Colonel GOODSELL. Yes, sir. That is correct. Mr. BLATNIK. Mr. Bennett, could we have the Corps of Engineers make a brief presentation on the technical features, or would you prefer to proceed first ? Colonel Goodsell, would you proceed then with Ontonagon Harbor, Mich.? Colonel GOODSELL. Ontonagon Harbor, Mich., Mr. Chairman and members of the committee. This report concerns improvement of Ontonagan Harbor, Mich., for deep-draft commercial vessels presently using the Great Lakes. The report is in response to the resolution of the Committees on Public Works of the Senate and the House, adopted July 2 and July 16, 1958, respectively. The report had been published as House Document 287, 87th Congress. Ontonagon Harbor is located on the south shore of Lake Superior, in Ontonagon County, Mich., about 136 water miles east of DuluthSuperior Harbor, Minn. and Wis. The existing Federal navigation project at Ontonagon provides in general for an entrance channel and an inner channel, all 15 to 17 feet deep, and for two parallel piers about 2,500 feet long and 250 feet apart which flank the entrance channel. Channel maintenance since 1950 has been limited mainly to serving the needs of commercial fishing and other shallow-draft traffic. Ontonagon County, of which the village of Ontonagon is the county seat, had a population in 1960 of 11,000. Major industries in the area include the manufacture of paperboard, the mining and refining of copper, general merchandising, commercial fishing, and recreational and tourist activities, which are important commercial pursuits of the area. Waterborne commerce consists principally now of fish landings, and minor amounts of fuel oil. Local interests desire an adequate harbor there with a depth of 21 feet. They point out that movement of commodities by deep-draft a vessel would result in substantial savings in transportation costs, and an improved harbor would enable expansion of existing plants, and development of new industries. The harbor presently affords safe vessel operation for only commercial fishing and other small craft. The plan of improvement recommended by the Chief of Engineers provides for flaring and deeping the lake approach channels to 23 feet and deepening the entrance channel to 21 feet, and expanding the harbor basin westerly for 1,750 feet, with a minimum width of 200 feet, to a depth of 21 feet, and dredging a sedimentation basin 30 feet deep in the inner basin. The outer end of the east pier would be replaced, and the remaining section of all existing piers would be reinforced and strengthened. Local interests would be required to provide lands, easements and rights-of-way, hold and save the United States free from damages, and accomplish the relocations; provide adequate public terminal and transfer facilities, open to all on equal terms, and to prohibit encroachment on the southerly shore, which is to be retained as a natural spending beach for the waves. Local interests indicate a willingness and ability to meet the requirements. The total estimated first cost is $4,886,000, of which $145,000 is nonFederal, for lands and relocations. Annual charges are estimated at $213,000 Federal and $7,000 non-Federal, for a total of $220,000. Total annual benefits, which are transportation savings, are estimated as $339,200, which, when compared to the annual cost, gives us a benefit-cost ratio of 1.5 to 1. The State of Michigan and the Department of the Interior comments on the proposed improvements are favorable. The Department of Commerce states it is their opinion that the available record does not clearly indicate sufficient économic benefits to warrant its endorsement. The Bureau of the Budget, taking into consideration apparently the Commerce Department's comments, states that while there would be no objection to the submission of the proposed review report on Ontonagon Harbor to the Congress, the Bureau of the Budget would expect that if the proposed improvement is authorized by the Congress it would be reexamined prior to submission of a request for funds to initiate its construction in the light of policies that may result from the cu ent transportation review, and of local conditions existing at that time. Mr. BLATNIK. How wide are those piers? 150 feet? Colonel GOODSELL. The existing piers up there are 2,500 feet long. Mr. BLATNIK. This center draft, Colonel, is that to provide new commodities or, for the most part, deeper draft vessels that carry existing commodities? Colonel GOODSELL. Yes, sir. They are getting small amounts of coal in there now and they are getting very small amounts of fuel oil in there. They have been, up until several years ago, shipping out considerable amounts of lumber. But they have not been able to maintain it so that they can get their ships in. What they intend to bring in is primarily coal and fuel oil in the larger lake vessels. Twenty-one feet normally will take care of cargo of that particular specific gravity. They expect to ship out of there lumber, paper products, and copper refined products. Mr. BLATNIK. I have no further questions. Mr. BALDWIN. Colonel, I am a little puzzled as to why there seems to be such a difference of opinion between the Corps of Engineers and the Department of Commerce. The corps comes up with quite a favorable benefit to cost ratio of 1.5 to 1. The Department of Commerce, on the other hand, states: It is the opinion of that agency that the available report does not clearly indicate sufficient economic benefits to warrant its endorsement. Why is there such a divergence of opinion between these two agencies? This is the first report we have had in these hearings, I believe, that showed such a divergence between one department of the Government and another one. Colonel GOODSELL. I suppose, sir, you can say it is a matter of opinion. We have what we consider to be adequate local assurances that this commerce will develop. We have gone to the local people. We have talked to them. We have talked to the sponsoring agency which is the Michigan Waterways Commission, and we have tried to determine, to the best of our ability, just how this commerce will develop. Our 1.5 benefit-cost ratio is based upon how we believe the commerce will develop. The Department of Commerce, in their comment, apparently is taking issue with our estimate of how the commerce will develop, and it would be essentially at variance with the information furnished by sponsoring local entities, who furnish the local assurances. Mr. BALDWIN. One other question: In the Bureau of the Budget's comments, the Bureau of the Budget says that it would want to reexamine this prior to the actual submission of the request for funds. And it says further that its review would be in the light of policies that may result from the current transportation review and of local conditions existing at that time. How would the current transportation review possibly affect this project, in your opinion? Colonel GOODSELL. Well, basically, they are trying to establish, as a result of a large-scale study, as I understand it, within the Commerce Department, a general plan for the use of various types of transportation facilities. To what extent it has progressed, I do not know. I have heard that they are working on it. I do not know when they might be finished with it or what the result of it might be. We have responded basically that we will look at the economies of this project again, as we normally do, prior to the time that funds are requested to see that we are definitely within reason and as precise as possible on the commerce at Ontonagon, if we go for funds before the Appropriations Subcommittees. I am sorry, I cannot answer fully your question on the transportation review, but I do know there is something in the wind, that it is on the way, and to what extent it has progressed within the Department of Commerce, I do not know. Mr. BALDWIN. Thank you. LANSING, MICH., September 20, 1962. Two railroads now very adequately serving Ontonagon and White Pine mine areas. If unnecessary and uneconomical Ontonagon Harbor project is approved, one railroad will abandon over 70 miles of line, and other road will sharply curtail operations. This will mean serious loss to economy of area as well as more hardship for the working people in an already depressed area. CHARLES OLIVIER, Chairman, Michigan State Legislative and Education Board, B. of L. F. & E., Marquette, Mich. LANSING, MICH., September 20, 1962. Hon. JOHN A. BLATNIK, House Office Building, Washington, D.C.: I understand Commerce Department cannot justify financial expenditure for Ontanogan Harbor project. Neither can we. Two railroads are already adequately serving area and could handle much more business without additional plant investment. Why spend thousands of dollars of taxpayers' money to give business to foreign ships and throw Americans out of work? That will happen to our rail workers if project is approved. R. C. PITSCH, Chairman, Michigan State Legislative and Education Board. LANSING, Mich., September 20, 1962. Hon. JOHN A. BLATNIK, House of Representatives, Washington, D.C.: I want to strongly protest uneconomical harbor project at Ontonagon which will cost taxpayers thousands of dollars and at the same time drive existing railroad service out of business. What sense is this? It will just put more of our men out of work. We have too much of that already. A. H. WICKMAN. LANSING, Mich., September 20, 1962. Hon. JOHN A. BLATNIK, House of Representatives, Washington, D.C.: If Ontonagon Harbor project goes through it will mean abandonment of 72.3 miles of railroad already adequately serving the area. This will mean big economic loss to the railroad, the district, and the many men who will be thrown out of work. Our men have had enough layoffs. We want work. This way the foreign ships will get it while Americans starve. R. A. WAY, Legislative and Educational Representative, Lodge 129. LANSING, Mich., September 20, 1962. Hon. JOHN A. BLATNIK, House of Representatives, Washington, D.C.: Ontonagon Harbor project in Michigan's Upper Peninsula cannot stand on own feet by any economic yardstick. It is uneconomical and unnecessary. Area now well served by two good railroads. Approval of waterway project will only be saddling public with permanent white elephant while at same time driving established business capital and jobs out of existence. What kind of thinking is this? Abandonment of 72 miles of railroad on one line, drastically cut service on the other will mean economic loss to area and big loss of jobs to local American workers in favor of foreign shipping. Our railroads have too many laid off workers now. R. F. VENTRELLA, Pinckney, Mich. STATEMENT OF HON. JOHN B. BENNETT, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN Mr. BENNETT. Mr. Chairman, yes, I would appreciate saying something in behalf of the project. Mr. BLATNIK. Do you want to take a chair, Congressman, and be comfortable? Mr. BENNETT. I would like to say this about the question posed by my friend from California, Mr. Baldwin, as to the difference in the viewpoints of the Corps of Engineers and the Department of Commerce in reference to this project. Te have a railroad that runs into Ontonagon, called the Milwaukee Railroad. It has been there for as long as I can remember and for many years before. Now, the railroad objects to any improvement in the harbor, whether it is large or small, and always has as a matter of policy. I think that is the policy of all the railroads where they have one of their lines running near or adjacent to a harbor and where they would be competing directly with traffic that might go in lake shipping. a |