The news in this publi
cation is released for the
press on receipt.
THE UNIVERSJTY OF NORTH CAROLINA
NEWS LETTER
Published Weekly by the
University of North Caro
lina for the University Ex
tension Division.
OCTOBER 29, 1924
CHAPEL HILL, N. C.
THE UNIVERSITY OF NORTH CAROLINA PRESS
VOL. X, NO. 50
, C. Braaaon, S. H. Hobba, Jr., L. R. WUaoa. & W. Koi^bt, D. D. Carroll, J. B Bullitt, H. W. Odum.
Entered aa Becend-claaa matter November 14, 1914, at thePoatofficeat Chapel Hill, N. C., under the actof Angnat S
benefits enure state
A verypertinentquestion being asked
by the people of the state in reference
to the Port Terminals and Water
Transportation proposal to be voted on
on November Fourth is. Will State-
Owned Port Terminals and Water-Rate
Competition Benefit the Entire State?
The answer cannot be a single word,
because it envolves (1) the excess
freight charges that handicap the
state, (2) the state-wide consequences,
and (3) the state-wide effect of the plan
proposed.
North Carolina paid $160,000,000 in
excess freights during the decade
ending with 1914, said Col. S. A. Jones
in a memorial to a committee of Con
gress ten years ago. As one-time chief
engineer of the Plant Railway system,
he had inside inf(>rmation. His figures
have never been denied, o^ not to the
knowledge of the campaign committee.
If North Carolin, ten years ago, was
paying 160 million dollars per decade
in “excessive, unreasonable, unjust
freight rates,’’ in the phrase of an
attorney of the Virginia Corporation,
then how many more such millions has
she been paying during the last ten
years,^with her producing power enor
mously increased? There is no definite
answer. No inside information leaks
out. The sources of authoritative in
formation are sealed. The freight
carriers know but they don't tell.
Four-Fold Increase
It is definitely known, however, (11
that the farm and factory wealth pro
duced in North Carolina is now right
around one and one half billion dol
lars a year, (2) that the excessive
freight millions we pay stifle the de
velopment of commercial centers in
North Carolina—which explains why our
cities are too few and too small to give
our farmers fair prices and profits for
their products, (4) that a state cannot
live on its factory wealth alone, that it
cannot safely grow rich on her indus
tries if her commerce and agriculture
are allowed to languish, (6) that these
excessive freight-millions, whatever
the total may be today, lower the price
on every raw product the farmer sells
and raise the price of everything what
soever that anybody buys in North Ca
rolina, (6) that the consumer at last
pays the bill of excessive freight
charges, and that everybody in the
state is .a consumer. It is also known
that the clear profits of the three rail
carriers were from $1,00£I to nearly
$6,000 per mile in 1922 more than in
the systems as wholes. See the S..S.
and W. T. C. Report, page 117.
But suppose we spell out Col. Jones’s
figure. It is ten years out of date'but
we will suppose, what is inconceiv
able, that our freight excess is no
larger today than itjwas ten years ago.
What does his figure mean? It means
an excess frieght tax on North Caro
lina of $41,000 a day. It increases the
household expense of every family in
the state. It reduces our commerce to
retail trade dependent on the port rates
of other states. It reduces the chahce
of our farmers to retain a reasonable
proportion of the wealth they produce.
Now set this $41,000 a day against
$],260 aday, the interest and sinking
fund charges of the propos^seven mil
lion dollars of bonds for port terminals.
Invest one thousand dollars a day and
save forty thousand dollars a day, is
roughly what the port terminals bill
proposes.
Worhs In Other States
Other states have adopted the pla*i
proposed, as a way out of their freight
troubles. Six states, Maine, Massa
chusetts, Rhode Island, Alabama,
Louisiana, and California have invested
in state-owned port terminals. And
moreover 61 water-front cities in 26
other states have been forced to invest
in municipal terminals in self-defence.
Among these are six little cities in
Florida, none of them with the natural
advantages of North Carolina. They
are curing state-wide jlls by applying a
state-wide cure.
Deep-water ports with adequate
terminal facilities open on fair and
equal terms to the commerce of all
the world (1) become rate-basing ports,
entitled to the undeniable right of cheap
er rail-and-water rates on through
bills lading, (2) they attract coastwise
and overseas shipping in ever increas
ing volume, (3) they swell portside
traffic and build up seaport businesses
because port-to-port water rates are
cheap—almost unbelievably cheap, (4)
they pass on cheap water-rates to in
land points having active barge line
connections with a deep-water port,
say to Fayetteville 100 miles inland;
they would make rate-basing ports of
our sound and riverside cities, as Rich
mond, for instance, which enjoys the
port rates of Norfolk, (6) they not
only cheapen the rail-rates to inland
points but they decrease the rail hauls
therefrom to immensely wider trade
areas that very nearly cover the
entire state. As Lynchburg, Roanoke,
and even Gauley W. Va., 450 miles
west, enjoy the cheap freight rates of
Norfolk, so our own inland cities
might enjoy the advantages of our own
rate-basing ports.
Ports Create Business
North Carolina now proposes to de
velop effective water transportation,
the plan that succeeds in other states.
But it cannot succeed in North Caro
lina (1) without deep-water rate-basing
ports adequately equipped and open to
all land and water traffic on fair and
equal terms of port charges and ser
vices, (2) without similar sound and
riverside ports connected with deep-
ports water by active barge and boat
lines, (3) without the Inland Waterway
that Congress proposes to complete if
only the state will get ready to use
it. Public port terminals attract
shipping in such volumes that the rail
carries scramble for it. For instance,
a single 6,000 deadweight-ton cargo
boat loaded to the gunwhales docks
freight enough to load to capacity five
frieght trains of 37 cars each, says the
chairman of the U. S. A. Port Facili
ties Commission.
Direct trunk-line traffic east and
west, a condition of success deemed
necessary by many thoughtful peo
ple, promises to follow if the state
will only alter the condition that
our north-and-south rail carriers now
capitalize to the state’s disadvantage.
A trunkline railroad from the Lake
states to public deep-water ports in
North Caralina is exactly what private
capital has long been looking for. It is
known that private capital has its eye
on this chance, if only the state will
create such chance.
SeeKing Port Facilities
The fandamental fact is that the
traffic Sfuth, east, and west via the
Panama Canal, to South Europe, South
America and the Pacific Coast, is grow
ing by leaps and bounds into immense
proportions, and that immense busi
nesses are interested in a South At
lantic port that is not already pre
empted by other private business in
terests. There is mo such seaport in
North Carolina. The state now pro
poses to have such ports and to seize
opportunity by the forelock. The West
is looking for a South Atlantic port
freely open to all traffic and offering
open weather and unimpeded traffic
twelve months of the year, which is an
advantage no port north of us enjoys.
The Westfis looking South and North
Carolina is unready. Charleston, with
public port terminals, is ready. Savan
nah is trying to get ready with a three
million dollar bond issue to expand and
equip municipal port terminals. The
amendment to the constitution giving
Savannah the right to issue municipal
port bonds will be voted on by the
people November 4th.
“It will be physically impossible for
our North Atlantic ports to take care of
our foreign commerce; it is, therefore,
absolutely essential that our South At
lantic ports be developed; in the next de
cade the greatest development will be in
the South”, says Edward N. Hurley,
former president of the U. S. Shipping
Board. Big businesses in the Middle
West are keenly aware of these facts.
Hence their interest injNorth Carolina
of late. North Carolina needs to be
keenly alive to a tremendous national
problem and her part in its solution, or
soon she may be on her knees begging
for freight service at any cost whatso-
SELF-SUPPORTING
The Port Terminals Act, section
11, plainly requires that they shall
be self-supporting. The Commission
is empowered to fix and regulate
terminal fees to this end, and not
even the Interstate Commerce Com
mission can interfere with the ser
vice charges of public port terminals.
See Interstate Commerce Law, sec
tion 16a. Terminal fees for loading
unloading, tranferring and so on are
dividend producers for private own
ers. Indeed port terminals are
oftentimes the most productive
property a railroad company owns.
To illustrate. The stevedore cost
of handling a cargo at a private
wharf in North Carolina is, say, 20
cents a ton, the shipowner pays
the terminal authorities 60 cents
a ton, and the terminal profits
on the labor of handling the car
go of a little 6000-ton boat is
around $1400. This instance—not
entirely mythical by-the-way—is
used to show landlubbers how pri
vate port terminals can be and
are made self-supporting and profit-
producing. And another instance.
The cost of handling seaward bound
Western grain in New York, a rail-
road-iowned seaport city, is around
$36 a car or $26 more than in
Chicago where public port facilities
keep handling costs low. There is
enormous terminal profit or enor
mous waste or both in New York
City. But also there is an enor- •
mous difference between Chicago
and New York whose port charges
are the highest in the world.
However, the point is that public
port terminals can be financed on
terminal charges just as our high
ways are financed on license fees and
gasoline taxes. They are so finan
ced in 68 port terminal cities in 31
water-front states, with results that
vary of course according to the port
policies adopted.
The seven state-owned terminals
are completely self-financing and
thus they lay lo burden whatsoever
on the taxpayers. They can be
completely self-financing in North
Carolina unless we have less sense
than pec'ple of other states. Per
haps not completely self-financing
while under construction but certain
ly so at last when in full use.—Port
Terminals and Water Tranpotation
Leaflet.
the way out of our traffic troubles. It
is the way distinctly proposed and
promoted by Congress and the Fed
eral authorities.—E. C. Branson.
The Only Way Out
Public port terminals in North Caro
lina provoke a thousand objections to
the plan proposed, The proposed plan
won't work, but only one other plan is
offered, namely, still further appeals to
the Interstate Commerce Commission.
A sufficient comment on this plan is that
North Carolina has been down on her
marrow-bones to courts and commis
sions for nearly forty years praying
for relief. And no relief comes, or
none that business can count on for
long. What we gain one day we lose
the next. Rail rates travel like Peck
sniff’s pony, mostly up and down.
Every body knows that. Why suggest
a plan of relief that everybody knows
is useless and fruitless? It is folly to
blame rail carriers and the Interstate
Comfherce Commission. They are
doing exactly what they are allowed to
under the law of the land. The fault
lies in ourselves. It lies in a condition
that the state alone can remove. Other
states are doing it in the name of all the
people, because all the people are bene-
fitted.
And the state can afford to create
public port terminals, because Congress
and the Interstate Commerce Commis
sion no longer allow rail carriers to
lower rates in order to destroy water
competition and thereby bankrupt port
terminal investments. It could be done
once upon a time, was done as a mat
ter of .fact. But it cannot be done
today. This single fact explains the
courage of six states in establishing
public port terminals, and also the
courage of 61 cities in 25 other water
front states.
Of course there is opposition, because
the proposed plan disturbs private
businesses privately conducted for pri
vate profits. A system of Port Ter
minals and Water Transportation is
QUESTIONS AND ANSWERS
14. Will water competition (1) lower
freight rates? (2) Has it done so in
other states? (3) Has any state suf
fered a loss by establishing public
port terminals?
Yes, because water rates are
everywhere lower than rail rates;
around 66 percent lower is the average
officially recognized. Water carriage
results (1) in enormous savings in trans
portation costs, (2) compels lower com
bination rail-and-water rates on through
bills lading, and (3) lowers rail rates.
For positive proof of these three re
sults, see p. 197 House Report 6647,
68th Congress, 1ft session, March 1924;
reprinted in Leaflet No. 17, and dis
tributed by the Port Terminals Cam
paign Committee, Sir Walter Hotel,
Raleigh.
Freight rates are high in North Caro
lina because they are almost entirely
rail rates. The commercial use of navi
gable waters is nearer zero in North
Carolina than in any other state in the
Union. Cheap water-borne commerce
is practically dead in this state, not by
the grace of God but by the will of
man. It was deliberately killed years
ago in this and in every other state.
It has been revived and developed in
thirty-one other states in very recent
times, as a means of lowering the costs
of transportation, but not so in North
Carolina or not as yet.
Benefits Everybody
2. Yes, because the water-rate sav
ings effected by public port terminals
and water competition are passed on to
interior trade territories. The savings
allowed by water transportation are
too large to be entirely absorbed by
manufacturers, merchants, and rail
roads, no matter what the local rail
rates are. The competition to get and to
hold customers insures the widespread
distribution of water-rate savings and
these savings reach the farthest limits
of trade in every direction. Take
Miami and Portland, Maine, as illustra
tions. Each is located in a state long
supposed to be commercially unimpor
tant. Each city has newly established
public port terminals. Each is amazed
at the rapid increase of its seaport
business and the effect upon business
of cheap water-freights in steadily
widening circles of trade. Such op
position arguments as North Carolina
is now hearing in the present campaign
sound like sheer nonsense to the Maine
and Florida people who call at the cam
paign headquarters of the Port Termi
nals committee. And they do not hesi
tate to say so.
How it WorKs in Florida
Miami is now getting Western grain
through New Orleans at a water-
rate of $4.90 a ton, against a rail rate
of $10.68. Here is a freight saving of
$6.68 per ton or $166.50 on carload
quantities. Five other little Florida
cities are enjoying similar cheap water
rates on grain and other Western
products, and these savings are being
passed on to every nook and corner of
the state. Public port terminals have
turned the trick in Florida. That's
the way they lower freight costs in
Florida and there is no other way to do
it anywhere.
Maine Reduces Freight Costs
And consider Maine with her newly
established state terminals at Portland.
Maine manufacturers are now shipping
boots and shoes through these terminals
to the Pacific coast by the all-water
route and they are saving thereby
$63.20 per ton or $1680 on carload quanti
ties. In exactly the same way her
print paper makers save $460 of freight
on carload quantities. The water-rate
saving on canned goods is $475 on car
load quantities to and from the Pacific
coast. That's Maine’s way of lowering
freight costs. It’s the water-way of
doing it and there is no other way for
North Carolina to do it. Facts like
these cannot be argued off the map by
the cunning of any brain. Exactly what
has been done by water transportation
in Florida and Maine can be done in
North Carolina. Transportation costs
can be lowered by public port terminals
and water-rates in this state as cer-
: tainly as in any other state.
Ports Self-Supporting
“Without exception state owned port
terminals have been self-supporting in
every state where they have been built.
Such terminals have not only been self-
supporting but they have paid off their
bonded indebtedness and have effected
a reduction of freight rates to the in
terior of the states that built them.”
So reports the State Ship and Water
Transportation Commission of nine
able citizens, after 14 months of inves
tigation aided by distinguished Army
engineers. These men can be trusted
to know and to state the facta compe
tently and honestly.
Public port terminals in 31 water
front states are lowering costs by sav
ing in water rates more than they
lose in rail rates, they are rapidly com.
ing to be rate-basing ports that can
demand rail-and-water rates on through
bills lading, and they are passing on
water-freight savings to every busi
ness and everybody. Exactly these
things are being done in other states.
There is no other way to stay on the
safe side of freight rates no matter
what the rail rates may be today or
may become tomorrow. Here is the
essential issue in this campaign and no
voter ought to allow himself to be
confused about it.
15. What water-front states do not have
public port terminals ? What disad
vantages do they suffer?
North Carolina is the only water
front state that does not have public
port terminals, although she has more
miles of navigable rivers and sounds
than any other American state, Florida
alone excepted. In water transporta
tion North Carolina illustrates Hum
boldt’s proverb: Where nature does
most for man, man does least for him
self.
States having no navigable waters
within their borders and no public port
terminals must rely solely or mainly on
rail carriage, which is from three to
nine times more expensive than water
carriage. On an average freight can
be carried three miles by water for
what it will cost to carry it one mile
by rail. A bushel of grain on the
Great Lakes is carried for one mill per
ton-mile;'the rail cost from Buffalo to
New York City is from 7 to nearly 10
mills per ton mile.
16. What part may the Federal Govern
ment be expected to have in devel
oping public port terminals in North
Carolina?
Exactly the same part that it plays
in other states (1) expert assistance
by the Army Engineer chief and his
staff in carrying out in North Carolina
the fundamental purpose of Congress
to develop water transportation as an
essential national necessity, and (2)
assistance in locating port terminals
and in planning, constructing, and
equipping the same to satisfy up-to-
date demands, and (3) appropriations
for widening, deepening, and protect
ing channels and harbors. All these
without expense to the state. Sixteen
million dollars have already been spent
upon these purposes in North Carolina,
and as many more millions as arew^nec-
essary can be had, if only the state
evidences a readiness to use the money
to advantage. If the Port Terminal
and Water Transportation Act is rati
fied on November 4, as many more*
millions as may be needed can be se
cured from the Federal government
to be spent on channels and' harbors,
says Senator Simmons.
“Every United States port should
own its own water front,” says the
United States law on this subject. The
River and Harbor Act of March 2, 1919,
says: “It is the policy of Congress (1)
that water terminals are essential to
all cities and towns located on harbors
or navigable waterways, (2) that at least
one public terminal should exist con
structed, owned and regulated by the
municipality or other agency of the
state, and open to the use of all on
equal terms, and (3) that the Secretary
of War is clothed with the authority to
withhold the appropriations of this Act
if.in his opinion adequate port termin
als do not already exist or are not
assured by public authority.” See the
SS and WTC Report, page 16.
The upshot of the matter is: No public
port terminals, no Federal appropria
tions for rivers and harbors in North Ca-
orlina. The government is now spending
nine millions on public port terminals
of Houston, Texas. Federal millions
can be had for such purposes in North
Carolina, but not unless we get busy
with public port terminals as Houston
is busy. She has just voted four more
millions of public port bonds.—E. C.
Branson.