United States. Inland Waterways Commission.

Preliminary report of the Inland Waterways Commission. Message from the President transmitting a preliminary report online

. (page 41 of 83)
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end. The second period began about a generation ago. The revival
of interest in waterways, taking place at about the same period in
difl'erent countries, seems to have been due to dissatisfaction with
railroad conditions and to a developing opinion that best results
would be secured by the exploitation of both transportation systems —
rail and water.

In no country has it been possible to secure satisfactory develop-
ment of both systems until one was protected against the other. As a
rule it has been necessary to invoke the power of the state to save
the traffic of waterways from destruction by railway competition.

It is believed, however, that fair consideration will convince any
candid student that this fact by no means demonstrates the imprac-
ticability or the economic inutility of waterways. The reasons for
this belief wdll be developed hereafter.

31673— S. Doc. 325, 60-1 25 377



378 KEPOET OF THE INLAND WATERWAYS COMMISSION

Those countries which have taken most pains and gone to greatest
expense to improve and systematize waterways, and which have most
carefully protected them in a share of traffic, are fully committed to
the policy of developing both rail and water transportation side by
side, as complements one of the other.

Experience has convinced these countries that the best and most
economic transportation is to be secured only by thus maintaining
both systems at high efficiency.

It is universal experience that development of waterways, resulting
in a great increase of their tonnage, does not injure the traffic of rail-
ways. Instead, the railways themselves appear to have actually
benefited by the expansion of the waterway systems, because with
each extension of facilities traffic has increased in still larger propor-
tions. Thus is the remarkable showing made of railroad traffic in-
creasing by leaps and bounds at the very time when waterways were
most liighly improved and constantly adding to their tonnage.

Development of water transportation has greatly reduced freight
charges, induced industrial and commercial development, and con-
tributed vastljT^ to prosperity and wealth.

So firmly is the conviction now esta]>lished that waterways con-
tribute to national prosperity that those countries in which the Gov-
ernment owns the railroads are foremost in developing waterways.
There is thus afforded the curious spectacle of a group of States, hav-
ing many billions invested in publicly owned railroads, building an-
other system of transportation to compete with the railroads, and
turning over this competing system to the substantially free use of
the community. More remarkable still is the universal testimony
that this policy has paid both in increased railroad profits and in
added national prosperity.

Great Britain is the one exception among European industrial
countries to the rule of encouraging both rail and water transport.
British railroad policy has aimed at the suppression of waterway
competition, and has pretty thoroughly succeeded. To-day the
British business community finds itself paying higher transporta-
tion tolls than continental countries, and because of this fact is at a
great and increasing disadvantage in competitive markets.

So serious has this situation come to be considered by British
traders that Parliament has taken cognizance of the demand for
rehabilitation of waterways, and a careful inquiry into the entire
subject of water and rail transportation is now being carried on by
the board of trade.

It seems interesting and significant that Great Britain and the
United States are the only industrial countries of the first class in
which water transportation has so long been neglected; and it is a
suggestive fact that in both these countries a powerful opinion has
lately developed in favor of following the lead of continental nations,
emancipating the waterways from railroad domination, and vigor-
ously developing them as an independent factor in transportation.

EARLY CANAL ERA ENDED BY RAILWAY DEVELOPMENT

Before the perfection of the steam locomotive and the introduc-
tion of railway transportation there had been an era of canal devel-
opment in most important countries. It is safe to say that if the



WATERWAYS AND RAILWAY TRAFFIC IN EUROPE 379

railroad had not been developed until a generation later than it
actually was, the system of canals and regulated rivers would now
be much more extensive and perfect than it is.

After the railroad had demonstrated its superior adaptability to
the conditions of the times there was a long period of quiescence in
waterway development, and it was not until the seventh and eighth
decades of the last century that public attention reverted to the pos-
sibilities of inland water communication. About this period there
came a general revival of interest in the subject throughout the pro-
gressive countries of continental Europe, although in England and
the United vStates the revival was postponed much longer.

The development of railways had made transportation vastly more
important than ever before, and at the end of the first generation of
railroad experience there began to grow up a strong impression that
while railroad transportation was vastly cheaper and more satis-
factory than in its beginning anybody had imagined it could be, it
was yet more expensive than was compatible with the best interest
of the business communit5^ This impression, together with the
rapid development of industrial competition, both internal and inter-
national, was responsible for the revival of interest in canals and
rivers, which it was believed had been unduly neglected and which
promised to give cheaper transportation, especially for bulky prod-
ucts of comparatively low value, than could be secured by rail.

In countries where railroads have been state owned, the govern-
ment has most promptly and vigorously interested itself in the devel-
opment of canals which should compete with the railroads. Canal
and river transportation has been least developed, and with the least
satisfactory results, in Great Britain and the United States, the two
first-class commercial countries which have never departed from the
rule of private railroad oAvnership. In both these countries compe-
tition between waterways and railroads resulted disastrously to
canals and river navigation. The vast aggregations of capital which
were brought together to finance the railroads were, in private con-
trol, powerfid enough largely to suppress competition by the water-
ways. As a result, in one way and another, many important canals
in Great Britain and the United States have fallen into the hands of
railroads and have become comparatively negligible factors in the
transportation scheme. Many have been converted into rights of
way for railroads, and few have been improved so that they could
have a fair chance in competing with the railroads. The impression
was that canals and rivers would never be able satisfactorily to com-
pete against railroads, and the decadence of internal waterways was
regarded as ine"\dtable and of no serious economic consequence.

REVIVAL OF INTEREST IN WATERWAYS

About forty years ago public opinion began to interest itself once
more in inland water transportation, particularly on the continent.
The impression became strong that if the railroads were permitted
permanently to monopolize inland transportation the problem of
raising capital for the necessary expansion of the railroad system
would become increasingly serious. Therefore, two considerations
moved the authorities, especially in countries where the railroads
were owned by the state, to a renewed study of the possibilities of



380 REPOKT OF THE INLAND WATERWAYS COMMISSION

water transportation. First, perhaps, was the growing beUef that
for many classes of freight water would provide equally satisfactory
transportation at less rates than the railroads. Only second to this
was the impression among state officials, who faced the problem of
raising money for extensions and improvements of railroads, that a
given investment in the improvement of rivers and in connecting
them by canals would provide means for moving a larger tonnage of
freight than an equal investment in railroad facilities.

The results achieved thus far through the rehabilitation of the
internal watenvaj^ systems of continental countries are generally
accepted as justifying this opinion. Even in Great Britain, where
distances are comparatively short, and where no miportant industrial
center is very far removed from the cheapest transportation in the
world — that by ocean — there is now a belated but animated concern
in behalf of the waterways, and commercial interests are making
themselves very active in the effort to enlist the state.

It was doubtless only natural that in Great Britain and the United
States the waterways revival should have been postponed longer than
in continental countries. It is fashionable to attribute the delay in
these two countries to the influence of the railroads, and no doubt
this was a factor of importance. But other considerations must
be assigned due weight. In Encrland the most important con-
sideration was the easy accessibility of ocean transportation; and
second was the fact that for various physical reasons the construc-
tion of canals is more difficult and expensive in England than in
most continental countries. England has no such great rivers as
the Danube, the Rhine, the Elbe, the Oder, the Seine, and other great
water highways of the Continent. The topography of Great Britain
makes canal construction more difficult than on the Continent. The
country is more uneven and more locks would be required, involving
greater expense. The question of water suj)ply for the higher levels
is so serious as in the opinion of some authorities to bar Great Britain
from ever securing economically a system of waterways approaching
the efficiency of those in France, Belgium, the Netherlands, Germany
and even Austria-Hungary.

TARDY WATERWAY REVIVAL IN GREAT BRITAIN

Yet freight rates imposed by the railroads are so high that despite
difficulties the demand for waterways is now becoming insistent.
While it is impossible, owing to the fact that British railroads have
never provided ton-mile statistics, to determine accurately how
English railroad rates compare with those of other countries, it is
accepted in Great Britain that the average cost of moving freight
there is greater than in any other mdustrial country. Various wit-
nesses on behalf of the traders, who appeared before the Royal
Commission on Internal Waterways, presented statistics on this
point, not always in agreement, but uniformly reaching the conclu-
sion that English transportation is the most expensive in Europe.
The handicap which this extra expense imposes on British industry
and agriculture is recognized and has been constantly referred to in
these hearings. The English industrial community is not agreed as
to a plan for rehabilitating the waterways, but most of the proposals
agree that the matter must not be left to private enterprise; that the



WATERWAYS AND RAILWAY TRAFFIC IN EUROPE 381

canals must be divorced from the railroads; and that in some manner
there must be a grant of public credit to finance the rehabilitation.
Whether this extension of public credit should be made directly by
the Government of the United Kingdom, or whether the capital
should be raised on the responsibility of local taxing bodies, or
whether, .as is now the rule on the Continent, the burden should be
divided between the general and local government bodies, is matter
of divided opinion. Officials of the royal commission have mani-
fested reticence as to the recommendation they are likely to make,
but the impression is strong that their report will make some con-
cession to the demand for improved waterways.

SITUATION IN THE UNITED STATES COMPARED

It has been said that in both England and the United States the
railroads have probably been unduly blamed for suppressing the
competition and the development of waterways. The reasons for
this belief as to England have been suggested. As to the United
States a different set of reasons probably should be assigned. In the
first place the vast area and comparatively sparse population of the
United States for a long time seemed to justify the belief that it
would be little less than waste of money to develop two transporta-
tion systems side by side. The problem, until recent years, was not
only to secure transportation facilities enough to move the freight,
but also to secure freight enough to make the transportation facilities
profitable. As railroads could go into all sections, while inland
waterways necessarily were limited in this regard, it was natural that
the railroads should have the preference. Moreover, as to the great
American rivers — vastly greater and more potentially useful in trans-
portation than the rivers of Europe — their tonnage and commercial
utility constantly decreased because the railroads were willing to take
the freight and until recent years afforded ample facilities for moving
it. To-day, however, the United States faces an entirely different
situation. Many of the railroads have been unable to meet the
demands upon them, and influential managers of railroads have
lately insisted that it was absolutely necessary that waterways be
developed to complement the railroad scheme of transportation.

Finally, as a further and most important reason why artificial or
semiartificial means of water transportation have been neglected in
the United States, may be stated the simple fact of the existence of
the Great Lakes. In these, nature has provided a transportation
highway ^\dth which neither railroads, rivers, canals, nor canahzed
rivers, nor any combination of the four, can possibly be compared.
The tremendous tonnage moved on the Great Lakes and its marvelous
development are regarded by European transportation authorities as
amon^ the wonders of the "^ world. Considering the cheapness and
unlimited capacity of the Lakes on the one hand, and the celerity and
universafity of railroad transportation on the other, it is small wonder
that the possibihties of rivers and canals were long unappreciated.

ERROR OF THE BRITISH IRON MAKERS

More than twenty years ago an Engfish student of commercial con-
ditions visited the United States to investigate the outlook of the iron



382 EEPORT OF THE INLAND WATERWAYS COMMISSION

and steel business in this country. On his return home he gave
assurances to British iron manufacturers that they need have no
serious fears of the competition of the United States, because in Amer-
ica the great iron ore deposits were too far distant from coal. He was
positive it would never be possible to bring the ore to the coal, or the
coal to the ore, at such rates as would enable production oi iron and
steel cheap enough to compete with England.

How completely erroneous was this conclusion need not be sug-
gested now, because everybody is familiar Avdth the marvelous facili-
ties for bringing the Lake Superior ores to the Pittsburg iron district,
and ^\^th the success of the American iron and steel interests in com-
peting ^^dth all the world, despite the initial disadvantages which they
had to overcome. Witnesses before the British Royal Commission
repeatedly declared that the process of bringing the Lake Superior
ores first by rail to the docks on the upper Lake, then by Lakes
Superior, Huron, and Erie to ports convenient to the coal districts,
and finally by rail to the seats of the iron industrj^, was the greatest
achievement in transportation that the world has seen.

So much for the British iron-makers' error in underrating the pos-
sibihties of internal transportation in the United States, As to Ger-
many, their error was hardly less striking. In the beginnings of the
great development of the German iron trade English iron interests
declined to take German competition seriously because the German
ore deposits were considered utterly inadequate for the development
of a really great industry, and it was presumed that the transportation
of great quantities of foreign ore to the seats of the German industries
would be so expensive as to make it utterly unprofitable. Yet, in
fact, the Germans have developed an iron industry which is now a
matter of concern to every competing countrs', and which is based,
like that of the United States, on a sj'stem of extremeh" cheap trans-
portation. While there is a large and increasing production of iron
ore in Luxembourg, which is utilized in the German iron industrj^, and
while Germany itself produces a large and growing annual tonnage of
ore, and brings still other large amounts from Austria-Hungary, it is
nevertheless true that the major part of the iron ore reduced in Ger-
many comes from the Scandina\nan peninsula and from Spain. To
the canals and canalized rivers of the Empire is due the credit for
making it possible thus to bring foreign ores to the German industrial
regions. Exceedingly low rates are made and the tonnage handled
by rivers and canals is tremendous.

Thus it appears that in both the United States and Germany the
development of the utmost possibilities of cheap inland water com-
munication is entitled to recognition for having made possible the
upbuilding of industries which a generation ago seemed economically
impossible. With their great supplies of coal and ore located very
close together, and with ocean transportation at their door, British
manufacturers seemed assured of a domination in the world's iron
trade that could only be ended by exhaustion of their supplies of coal
or iron. A verv^ different situation has been brought about largely
because of the utilization of internal water transportation in the
United States and Germany. This one object lesson has deeph^ im-
pressed the British community, and in no small measure has been
responsible for the present agitation of the waterways question.



WATERWAYS AND RAILWAY TRAFFIC IN EUROPE 383

WHY WATERWAYS MUST BE PROTECTED FROM UNBRIDLED RAILWAY

COMPETITION

It has been suggested that in both Great Britain and the United
States the railroads have been charged with more than their real part
of responsibility for preventing development of internal waterways,
yet the fact remains that it is m those countries which have govern-
ment ownership of railroads, and where governmental pohcy has pro-
tected the developing waterway systems from ruinous competition
with the railways, that the waterways have been developed to the
greatest extent and efficiency.

The fact that in different countries it has repeatedly been found
necessary to adopt vigorous measures to prevent the railroads from
destroying the business of internal waterways by the simple process
of hauling freight more cheaply than it could be moved by water,
must be met by the advocates of waterway development. It is a
fact which must be explained away in any effective argument in
favor of water transporation as against railways. The truth is that
in German}", in France, in Belgium, three countries whose waterway
systems have reached highest perfection, as well as in Britain, the
railroads have proved their ability to take the tonnage away from
water routes and to keep it away from them. The railroads have
done this, too, in the face of the fact that they were required to earn
not only their operating expenses but heavy charges on capital debt,
while the canals were operated in the main free of charge. While
freight by rail must pay not only the expense of running the train,
but also the charge for maintenance of roadway and interest on capi-
tal invested, practically the only expense attached to water trans-
portation has been that for mere operation of boats and barges. The
water highway has been provided at Government expense. Com-
merce moving on it has not been expected to remunerate the Govern-
ment or even to pay interest on capital. With the railroads thus
handicapped, if the waterways could not take care of themselves the
burden is upon waterway advocates to prove the waterways' eco-
nomic right to survive.

This can not be too fully understood or too carefully studied by
advocates of water transportation. In any analytical consideration
of the difHculties of internal water transport the experience of Euro-
pean countries is certain to be presented, to be emphasized in many
ways, and to demand satisfactory explanation. It is proposed now
to suggest some reasons why the inability of water highways to com-
pete against the unrestricted competition of railways is not necessarily
a demonstration that water transportation is -economically wasteful
compared to rail.

The case for water transportation can not be stated in a few sen-
tences. ' It is necessary to recall something of transportation history.
It has already been pointed out that there was a considerable develop-
ment of water transportation in many countries before the railroad
came. The canals of that earlier era were small, and while they
represented a vast improvement over any facilities that had pre-
viously existed, nevertheless, with their small gauges, their shallow
draft, and numerous locks, they were not fitted for competition with
the railroad. Furthermore, while engineering skill has made it pos -



384 REPORT OF THE INLAND WATERWAYS COMMISSION

sible to carry the railroad practically everywhere — tunneling moun-
tains, spanning great rivers, burrowing under arms of the ocean,
overcoming every obstacle — no skill and no expenditure could carry
waterways into many regions which railroads could enter. Conse-
quently, if the two systems, water and rail, had been started in an
even competition, water would have been placed at a great and irre-
movable disadvantage. The railroad could reach every market and
every industrial center; not so the water.

Now it must be borne in mind that at the time, three-fourths of a
century ago, when the industrial world seemed called upon to deter-
mine which system of transportation it would accept and develop,
there was no conception of the tremendous part transportation was
to play in the future. The wildest visionary would not have dared
predict that by the dawning of the twentieth century the tonnage
of freight would be even a small fraction of the immense amount
that now moves. The idea that Europe and North America would
be gridironed with hundreds of thousands of miles of railroads, mov-
ing billions of tons of goods, would have been scouted. At that time
it was assumed that commerce made transportation, the idea that
transportation makes commerce was of later development. The pos-
sible development of both the consuming and producing capacities
of great populations was utterly unsuspected. Nobody dreamed that
commerce would soon demand all the accommodations that both
rail and water could provide. It seemed a mere question of choosing
between two systems of transportation, and naturally the one which
offered the widest range of usefulness was taken up.

So for several decades waterwa3^s were neglected and energies
devoted to railroads. These at first were local enterprises, lines were
short, and there was little thought of developing great systems.
But as time passed and commerce expanded wdth the growth of
facilities, local roads were joined into systems, systems were federated
into groups, and presently the marvel of the modern railroad fabric
had been wrought. Railroads were everywhere, they could handle
everything; they made transportation inconceivably cheaper, safer,
and more expeditious than ever before. So it came about that m a
short time railroads had reached magnificent efficiency and approxi-
mate universality, while waterways had ceased to develop and had
become less and less factors in transport. Then came the era of
attempted waterway rehabilitation.

Conviction that wliile railroads had wonderfully cheapened trans-
portation, waterways would still further reduce this charge, was
partly responsible for the revival of interest in waterways. Railways
had learned the art of suppressing competition among themselves.
Abuses had grown up. Because of these, dissatisfaction with railroad
conditions developed in many countries about the same time. The
epoch of "granger legislation" in the United States was s}Tichronous
with a period of very similar agitation in Germany. In the latter
country the agitation resulted in nationalization of railroads. In the
United States it initiated the movement for government control.



Online LibraryUnited States. Inland Waterways CommissionPreliminary report of the Inland Waterways Commission. Message from the President transmitting a preliminary report → online text (page 41 of 83)