, ^ * ■% • * * • 1 ' ICrttrr nf ®ranamttial aufi dijtuipata of Sryart ••• • • on Nmi ©rbatta 8>Ijtp (ttattal an& Qtermtnal Hoarii of OIommiaHtonpra of tfj? ^orl of IKrui (0rlpana 3Fnri>, liarott & Bauia lEngittPpra !Ni?m ©rlrana, lia. Hun? 3D, 1315 fetter nf ®ranamittal Arnmtpattymg * Srpnrt New Orleans, June 30, 1915. Board of Commissioners of the Port of New Orleans, New Orleans, La. Hon. Ernest M. Loeb, President, Hon. A. M. Lockett, Vice-President, Hon. Walter Van Benthuysen, Secretary, Hon. Charles D. O'Connor, Hon. W. O. Hudson. Gentlemen: The State of Louisiana by constitutional amendment approved November 3rd, 1914, authorized the construction and operation, within the city limits of New Orleans, of a navigation canal and necessary locks, slips, laterals, basins and appurtenances connecting Lake Pontchartrain and the Mississippi River. In accordance with your directions we have prepared and transmit to you herewith the result of our surveys, analyses and estimates relating to the Port of New Orleans and principal locations for structures and developments authorized by this amendment. REPORT Our report includes: First: A summary of the salient features of the plans, diagrams, maps and tabulations used as a basis of our estimates, deductions and recommendations. Second: An analysis of the manufacturing, banking, com¬ mercial and transportation relations of the Missis¬ sippi Valley cities including Chicago, Pittsburg, Cincinnati, Louisville, Omaha, Kansas City, St. Louis, Memphis, St. Paul and the Port of New Orleans for the purpose of determining the extent of common interests between these centers and the bases, if any, for more extended relations. 1 Third:.; An.-analysis of the raw material resources of the "t *' • -Slajte- tof-Louisiana and the section of which New Orleans is the center and a description of the man- -.1 .**. • uiacturing and industrial plants now located in and • " * * • •«*••• Tnja,- the harbor of New Orleans with a statement of the principal requirements of this center to fur¬ ther advance its industrial importance. A review of the advantages of location and the relation of New Orleans to established rail and water transportation lines. A review of the present and proposed port facili¬ ties of New Orleans and other similar ports. A comparison of import and export rates of the Atlantic and Gulf ports and a review of transpor¬ tation rates applying to New Orleans, especially regarding their application to products of present and proposed manufacturing plants located here. An analysis of the relations of New Orleans to the world trade lines and markets. An analysis of the advantages of New Orleans as a market of concentration, distribution and deposit. A review of the typical canals, basins and indus¬ trial terminals now in use in the United States and abroad. A description of the various canal or ship basin locations within the city limits of New Orleans and an analysis of the proposed plans of develop¬ ment with estimates of construction costs of the necessary structures. It is recognized in these considerations that a port belongs rather to a section than to a city or even a state. The Port of New Orleans belongs to the Mississippi Valley, although administered by the State of Louisiana, and, in some features, the City of New Orleans. In addition, the authorized canal can only be considered as one of the structures of the Port of New Orleans and apart from its merits as a feature of the port, will be financially successful only as thef" general port succeeds. Although this development may add materially to the equipment of the port and its services to its hinterland, the Mississippi Valley, as well as the world trade lines using it, still, if the port as a whole does not grow, a ship canal and terminal as one of its structures will not become important. Fourth: Fifth: Sixth: ft Seventh: Eighth: Ninth: Tenth: Our report is therefore: 1. An exposition of the conditions and advantages which insure the supremacy and advancement of the Port of New Orleans, and 2. An analysis of the proposed ship canal and terminal devel¬ opment. THE PRESENT WEALTH, POPULATION, MANUFACTURING AND BUSINESS CONDITIONS OF THE PORT OF NEW ORLEANS • The wealth and growth of this port are dependent upon the extent and growth of its manufacturing, banking and mercantile facilities and these in turn upon the availability of raw products, costs of transportation (including trans-shipment) and labor. v New Orleans is a two-way port, 46% of its tonnage being imports, and 54% exports. This condition is one of its greatest advantages insuring the best rail and water transportation lines and the best rates. The value of its imports has increased from $17,490,811 in 1900 to $89,382,621 in 1914, equivalent to 411%. The total capital, surplus and deposits of all banks of the port have increased from $30,862,450 in 1900 to $100,841,200 in 1914, or 266.7%. The total foreign and coastwise commerce of the port has increased from 2,447,876 gross tons of ships inward in 1900 to 6,219,609 in 1914, or 154%. The gross value of manufactured products of New Orleans as given by the last census was $78,794,030, equivalent to $232.38 per capita, $4,585 per wage earner, and $88,200 per establishment. The population of the Port of New Orleans within port limits is at present 400,000. The present wealth of the port is at least $400,000,000, equivalent to $1,000 per capita. The principal manufacturing industries of the port within and exterior to the port limits are: Lumber manufacture and working, Sugar refining, Sheet metal working, Bag manufacture, Rice cleaning and polishing, Furniture manufacture, The manufacture of chemicals, The manufacture of fertilizers, The manufacture of cotton oil products, Meat packing, Oil refining, Coffee roasting, Cotton milling, Tobacco manufacture. Canning industries, including fruit, vegetables, shrimp, syrup, etc. 3 For nearly all manufacturing industries there is a distinct advan¬ tage in freight rates in being in ocean harbors rather than in the interior even at railroad centers. This advantage in industries where transportation of products is the largest manufacturing and delivery item, as in lumbering and mining products, may amount to 20% of operating costs. Through its economy of location the port has recently acquired a number of important industries now on both banks of the Mississippi River and in some cases exterior to the harbor limits. This is par¬ ticularly true of the various oil plants and refineries. The advanages of private ownership of the land on which manufacturing and shipping facilities are located often more than offset the disadvantages of loca¬ tions beyond the city services. THE POTENTIAL ASSETS OF THE PORT OF NEW ORLEANS The potential assets of the port are: 1. Its manufacturing advantages in its location equi-distant between points of origin of raw materials and the destina¬ tions of manufactured products. 2. Its transportation advantages in its location at the mouth of the Mississippi River system and on the Gulf of Mexico. 3. Its advantages in concentration and distribution of products between the Mississippi Valley and points on the Pacific Ocean. The additional or extended manufacturing industries which could be advantageously located here are: 1. Steel and allied plants including machine shops and foundries. (This being a normal meeting ground as in the cases of Bal¬ timore, Buffalo and Gary, of iron ore or pig iron by water from South America and Cuba and coal by water from Bir¬ mingham and Pittsburg.) 2. By-product coke oven plants. 3. Harbor coaling plants and tipples. 4. Shipbuilding plants and dry docks for the construction and repair of steel vessels. 5. Flour mills. 6. Lumber mills. 7. Meat packing plants. 8. Cotton mills. 9. Oil refineries. 10. Canning plants, and extensions of present establishments, particularly for the manufacture of chemicals and cotton products. Based upon present freight rates all of the manufactured products of these industries can be advantageously distributed from New 4 Orleans and with the savings from river and additional ocean trans¬ portation lines the manufacturing advantages of the port will be cor¬ respondingly greater. The actual and potential assets of the port for the concentration, distribution and holding of products will be realized through the con¬ struction of deposit warehouses including: 1. Cotton warehouses. 2. Grain elevators and annex grain storage. 3. Coffee warehouses. 4. Tobacco warehouses. 5. Sugar warehouses. 6. Fruit-storage plants. 7. Fish and sea food shipping and storage plants. 8. Lumber storage basins. 9. Sisal warehouses. REDUCED FREIGHT RATES WILL INSURE THE ESTAB¬ LISHMENT OF MANUFACTURING INDUSTRIES New Orleans at present is only a rail center and ocean harbor in competition with Galveston, Mobile, Pensacola, Savannah and other Gulf and Atlantic ports. However, without using the Mississippi River, except as a harbor, the trade of the port in value of commodities trans-shipped is at present at a rate in excess of $1,000,000 per day. It is the second port of the United States in value of import and export commodities and is probably the best example in this country of governmental ownership and operation, applying not only to wharves, but to ex¬ tensive warehouse plants, grain elevators, terminal yards and belt railroads. The prosperity of the port, particularly of its manufacturing indus¬ tries, is a question of freight rates. Equipped waterways are the only and absolute means of reducing and maintaining reduced rates. A period of important business growth at this port will begin when it takes greater commercial advantage of its position on the Missis¬ sippi River system. The most urgent problem confronting the port for solution is a practicable method of either re-establishing river transportation or ob¬ taining its enormous advantages through reduced costs of rail trans¬ portation. PRINCIPAL CAUSE OF ABANDONMENT OF WATERWAYS The underlying reason for the practical abandonment of river and ocean transportation by American promoters and investors has been 5 the impracticability under open water course conditions of monop¬ olizing the water routes, while the railroads for example with their privately owned routes have been particularly adapted to monopo¬ listic promotion and capitalization, yielding very large promotion profits. Intrinsically, river transportation including necessary trans-ship¬ ment is far cheaper than rail. However, it is logical to assume that private capital will not be invested in undertakings without reason¬ able assurance of profit. The history of water transportation in the United States, both ocean and otherwise, shows that without pro¬ tection as in other businesses, it disappears. Foreign steamship trans¬ portation companies and ship builders have been protected by their various governments and if the benefits of lower freight rates, both ocean and inland, are to be attained, governmental protection is necessary. RIVER NAVIGATION WILL BE RE-ESTABLISHED THROUGH GOVERNMENTAL PRO¬ TECTION OR OWNERSHIP Transportation on the Mississippi River system will be re-estab¬ lished through a combination of the following recent considerations and developments: 1. The necessity through the effects of the opening of the Panama Canal of direct water routes from the Mississippi Valley cities to points on the Pacific Ocean. 2. The compulsory issuance, under the powers of the Interstate Commerce Commission, of through bills of lading between the railroads and water carriers. 3. The co-ordination of river and rail transportation at terminals. (The Interstate Commerce Commission has all the powers to enforce physical connections between carriers and interchange of freight.) 4. The acquisition and operation by the public of rail and motor roadway feeder lines to serve trunk water lines. 5. The protection by the government from invasion of the established businesses of water transportation lines, or the ownership and operation by cities, states and the nation of these lines. State canals have been leased to operating companies. New York and Philadelphia have found it necessary to build subways and elevated structures for lease to operating companies for internal pas¬ senger transportation which is suggestive of similar governmental construction and leasing of trunk line railroads. If private ownership and operation of Mississippi River transporta¬ tion lines under competitive conditions and the protection by the 6 government through recent legislation is not financially successful, then more direct methods may be employed: 1. Through the leasing of river routes by the government to transportation lines; and 2. Through the governmental ownership and operation of water lines. SAVINGS IN FREIGHT COSTS THROUGH RIVER TRANSPORTATION River transportation of freight under governmental protection and with complete modern structures and equipment will not cost the consumer to exceed 4.75 mills per ton mile, as compared with rail¬ road transportation costs for the entire United States in 1913 of 7.29 mills, a saving of 2.54 mills. It is estimated that there is a freight tonnage movement by rail which appears at or passes through New Orleans in excess of 2,000,- 000,000 ton miles per annum. If this were transported by river a saving per annum to consumers of $5,080,000 would be effected. This saving alone would give New Orleans a preferential position with manufacturers as well as wholesale distributors. ADVANTAGES OF A SHIP CANAL AND INDUSTRIAL BASIN TO MANUFACTORIES In adding to the present advantages of the port for manufacturing industries and the warehousing of products a ship canal or industrial basin, as previously noted, is authorized and proposed. The advan¬ tages of this structure are: 1. It allows of private ownership of land on private slips in the harbor of New Orleans for the location of manufacturing and shipping plants. 2. It concentrates harbor facilities, including warehouses and manufacturing lofts, minimizing the length and expense of" haul in trans-shipment. 3. It can be indefinitely extended/ 4. It can be completely constructed, including masonry wharves, and similar structures before the water is allowed to enter, thus both enormously reducing the cost of submarine con¬ struction and improving the quality of the work. 5. It can be developed into transverse wharves and slips, thus insuring the distinct advantages of this type of construction, which is not practical along the Mississippi River front. 6. It allows of ample land space at moderate costs. 7. It is a feature of harbor equipment adopted or in process of adoption by nearly all the progressive harbors of the world. 7 New Orleans is at present a trans-shipment point rather than a manufacturing center or even a market of deposit. Proprietorship in harbor frontage is not possible under Article 200, Constitution of the State of Louisiana, and for manufacturing establishments this is a serious disadvantge. If certain additional advantages were furnished, particularly in ownership of harbor frontage, the advantages of this port for manufacturing industries would be complete. Industries of Chicago, Milwaukee, St. Louis and other cities of the central west, sending their products to points on the Pacific Coast of the United States, will find it to their advantage to move to New Orleans because of the present comparatively low water rates in effect since the commencement of operation of the Panama Canal compared to all rail rates. Owing to the present and future manufacturing, transportation and storage advantages of this port, industries from interior cities, either in whole or in part, will be transferred to New Orleans. This will especially apply to steel products, warehouses, by-product coke ovens, machine shops and foundries from Alabama, flouring mills from Minneapolis, St. Paul, and Duluth, meat packing plants from Kansas City and Chicago, soap manufacturing from Cincinnati, automobile assembling works and storage warehouses from Detroit, and paper, woolen and cotton mills from New England. ROUTES OR LOCATIONS OF THE PROPOSED CANAL Our report covers five distinct routes or locations within the city limits of New Orleans for the proposed canal connecting Lake Pont- chartrain and the Mississippi River. One of these locations has been considered for four different types or limits of development. A thorough review of property assessment values has been made and compiled as a basis of land purchase values for canal, basin or industrial site purposes. Costs of damage to abutting property are so variable in comparison to the costs of the structures, ranging form 5% to more than 100% of other costs, that they have been omitted, except in general terms, in all estimates. Route No. 1: Begins at the Mississippi River between Carrollton Avenue and the upper parish line, and connects with the New Basin Canal at a suitable point between these limits. Route No. 2: Begins at the Mississippi River between Jackson Avenue and Canal Street and connects with the head of the New Basin Canal at Rampart and Julia Streets. Route No. 3: Begins at the Mississippi River between Canal Street and Esplanade Avenue, and connects with the head of Caron- delet Canal between St. Claude and Rampart Streets on Carondelet Walk. Route No. 4: .Begins at the Mississippi River between Press Street and the lower parish line and extends almost due north to 8 Lake Pontchartrain. This route is the shortest distance between Lake Pontchartrain and the river, being 5.3 miles. Route No. 5: Begins at the Mississippi River and Jackson Bar¬ racks and extends nearly due north to Lake Pontchartrain. SUMMARY OF THE VARIOUS DEVELOPMENTS INCLUD¬ ING GENERAL DIMENSIONS OF STRUCTURES AND TOTAL COSTS The principal suggested routes entirely within the limits of the City of New Orleans with the possible development of each, together with present navigation canals, are in general outline as follows: NEW BASIN AND CARONDELET CANALS The New Basin Canal is 6.35 miles in length, varies in width from 60 to 110 feet between revetment structures and has an average depth of 9 feet on a right-of-way 300 feet in width. The Carondelet Canal is from 60 to 80 feet in width between revet¬ ment structures, 1.57 miles in length joining Bayou St. John which is 4.24 miles in length. Both the Canal and the Bayou have an average depth of 6 feet on a right-of-way 150 feet in width. ROUTE No. 1 Development No. 1—Barge Canal Real Estate: Under this development a right-of-way 600 feet wide for 1,000 feet at the locks and 300 feet wide for the remainder of the route connects the Mississippi River and the New Basin Canal. The land area to be purchased amounts to approximately 80 acres. Construction: One lock of reinforced concrete 300 feet long, 50 feet wide and 10 feet deep over sills. Canal: 200 feet wide at the top, 80 feet wide at the bottom, 10 feet deep and 12,000 feet in length. Total Estimated Cost: $4,120,137 exclusive of abutting property damages. ROUTE No. 2 Development No. 2—Barge Canal Real Estate: Under this development a right-of-way 600 feet wide for 1,000 feet at the locks and 218 feet wide for the remainder of the route connects the Mississippi River and the New Basin Canal. The land area to be purchased amounts to approximately 18 acres. Construction: One lock of reinforced concrete 300 feet long, 50 feet wide and 10 feet deep over sills. Canal: 80 feet wide at the top and bottom, 10 feet deep, and 5,000 feet in length. Total Estimated Cost: $6,819,000 exclusive of abutting property damages. 9 ROUTE No. 3 Development No. 3—Barge Canal Real Estate: Under this development a right-of-way 600 feet wide for 1,000 feet at the locks and 300 feet wide for the remainder of the route connects the Mississippi River and the Carondelet Canal. The land area to be purchased amounts to approximately 20 acres. Construction: One lock of reinforced concrete 300 feet long, 50 feet wide and 10 feet deep over sills. Canal: 60 feet wide at top and bottom, 10 feet deep and 3,000 feet in length. Total Estimated Cost: $4,534,880 exclusive of abutting property damages. Developments Nos. 1, 2 and 3 located on Routes Nos. 1, 2 and 3 are barge canals, being extensions of the New Basin and Carondelet Canals, equipped with barge locks. Developments Nos. 1 and 2 con¬ nect the Mississippi River with the New Basin Canal and Development No. 3 with the Carondelet Canal. In each of these developments it is impracticable, because of excessive costs, to purchase land for industrial sites. The routes not only involve excessive property costs and possible damages in passing through railroad yards, highly devel¬ oped residential or business sections causing the removal of impor¬ tant and expensive structures, but pass over routes crossed at every street by heavy traffic lines of street railway and vehicular service. None of these routes are available for ships because of the necessity of the operation of draw or other movable bridges and they would hardly be available for the operation of barges unless these were specially constructed to operate under raised bridges. Not only would there appear excessive costs of construction considering the possible earn¬ ings, but the interruptions in operation owing to the congestion of traffic would make these routes impracticable. ROUTE No. 4 Development No. 4—Barge Canal Real Estate: Under this development a right-of-way 600 feet wide for 1,000 feet at the lock connects the Mississippi River and Lake Pontchartrain. The land area is approximately 209.12 acres. Construction: One lock of reinforced concrete 300 feet long, 50 feet wide, 10 feet deep over sills. Canal: 175 feet wide at the top and 80 feet wide at the bottom, 10 feet deep and 5.3 miles long. This canal may be enlarged into a ship canal. It is located in practically vacant territory, giving ample opportunity, at moderate prices, for private ownership of terminals. The construction cost of 10 the development including necessary real estate, but exclusive of abutting property damages, if any, is estimated as follows: Land ... ..... $ 295,277.00 Excavation — mi. ww 578,463.00 Lock - f—_— 584,694.00 Railroad Bridges ..... ~ 220,000.00 Breakwater _—62,500.00 Reconstruction of Public Utilities 400,000.00 River Protection ... —____ 35,000.00 General, Contingent and Engineering Expenses...,. 261,112.00 Total S3.437.046.00 No land for industrial sites is embraced in this plan. It is assumed that the annual operating expenses^interest charges and sinking fund-— requirements are obtained through rentals paid for frontage on the canal and through tolls upon the commodities moved on the canal. The tolls and rentals of the New Basin Canal now in effect con¬ sist of a charge of 30^ per gross registered ton of vessel including towage and a rental of from $1.00 to $3.00 per lineal foot, per annum, for use of the canal banks. The rental of $1.00 per lineal foot per annum applies to tenants owning or operating vessels and paying tolls, and $3.00 per lineal foot per annum to other occupants of canal frontage. A charge of $3.00 per front foot per annum is made to tenants erecting buildings on the canal frontage regardless of whether tolls are paid or not. The estimates of revenues of the proposed Development No. 4 are based upon assumed tolls of 10^ per ton of cargo of vessel for lock¬ age and towage service, and $1.50 per front foot per annum for rental. The commodity tonnage moving through the canal toward New Orleans would consist principally of coal, building stone, crushed stone and slag, manufacturel steel and iron products, sand and lum¬ ber. The return tonnage toward Birmingham and the interior would consist of the extensive imports entering New Orleans, as well as the manufactured products of the port, including a part of 17,000,000 pounds of refined sugar sent annually from New Orleans to Alabama cities situated on present water courses. Miscellaneous raw materials and manufactured products would increase as industries along the canal and in the general harbor increase, particularly when more advantageous rates by water from the Birmingham district become effective. As tonnage movement in the canal increases the tolls should be proportionately reduced, since the charge to be met would be almost constant. Assuming a sufficient sinking fund for the retirement of the bonds after a period of 40 years, at the end of this period, the 11 bonds having been retired, the tolls would be reduced to an amount sufficient to cover only the operating expense, which then should not exceed per ton of commodity movement by the canal. ESTIMATED AVERAGE ANNUAL REVENUE First 10-Year Period Canal Frontage Rental, 50,000 feet at $1.50 per foot $ 75,000 Tolls on Tonnage of Freight, 1,100,000 tons at 10^ per ton .., — 110,000 Total Annual Revenue $185,000 ESTIMATED AVERAGE ANNUAL OPERATING EXPENSES First 10-Year Period Tow boat operation—2 tugs -....$10,000 Maintenance of lock and canal 10,000 Operation of locks..,-.—-,..-. —— 6,600 Dredging 2,500 Salaries of officers and clerks mmmmmm 6.000 Miscellaneous 2,000 Total Annual Operating Expense... — $37,100 ESTIMATED ANNUAL FIXED CHARGES Interest 5% on $2,437,046._ $121,852 Sinking Fund (40 years) .00828 on $2,437,046 20,179 Total Annual Fixed Charges.,....,..,—...... ~-j$142,031 Total Annual Operating Expenses and Fixed Charges $179,131 In the main harbors of the world the shifting of vessels from berth to berth is uncommon. This practice will in the future disappear in New Orleans with the result that a greater use of barges will be made and loading from barges located on the stream side of the vessel will become general. The greater use of barges and river boats will make the location of industries on a barge or ship canal within city limits and near the business center of the port as desirable for delivery and trans-shipment as on or near the river front, with the additional advantages of private ownership of land or a nominal rental for the canal banks occupied. Barges, in effect, become floating wharves and thus extend the avail¬ able wharf area of the port and, in addition, give the ship lying at a longitudinal river wharf the advantage of loading from both sides as 12 in slip operation, which effects a large saving in time of discharging and loading of cargo. FINANCIAL PLANS INVOLVING PURCHASE AND SALES OF REAL ESTATE The proposed Developments No. 1 to No. 4, inclusive, are depend¬ ent for revenue upon a system of tolls and rentals analogous to that now in effect. Developments No. 4-A-B-C and No. 5 are based upon the assumption, subject to competent legal opinion, that land on the banks of the canal or ship basin in excess of the right-of-way re¬ quirements may be purchased by the Board of Port Commissioners en bloc and resold in sections at advanced prices to private individuals or corporations for the location and ownership of private terminal facilities. Under this plan, the sale price of the land is assumed to amortize the entire construction and development with interest thereon during the time the bonds are outstanding. After this period only moderate tolls for lockage need be imposed to meet lock operations and general maintenance of structures. ROUTE No. 4—Development No. 4-A This development, as well as No. 4-B and No. 4-C, is a compre¬ hensive plan intended to indicate the ultimate extent to which the canal basin and industrial terminal may be carried when the growth of the port warrants it. The canal is 35 feet in depth and of dimensions as detailed with both a ship lock and a barge lock. The land included is approxi¬ mately IV2 miles wide and extends from the Mississippi River to Lake Pontchartrain. If interest at 5% for a construction period of three years be added to the construction cost of the River-Lake Pontchartrain development of No. 4-A, amounting to $13,929,843, the investment would become $16,019,319. The land available for sale as industrial sites amounts to 4,231 acres fronting on the main canal. To return the construction cost and interest as above within three years, the land would have to be sold at the rate of 1,410 acres per year at an average price of $3,800 per acre. Assuming a 40-year sinking fund plan, the annual interest and sink¬ ing fund charge is $933,604. To pay this annual fixed charge, thus amortizing the cost of devel¬ opment, it would be necessary to sell the land on the canal at an average of $7,670 per acre. On a sinking fund basis, to pay the interest and retire the bonds in 25 years, the land would have to be sold at approximately $5,840 per acre. 13 The plans and estimates relating to this comprehensive develop¬ ment are presented merely to indicate what may be accomplished in the future should the growth of the port justify it. ROUTE No. 4—Development 4-B This development involves a 30-foot canal and lock connecting Lake Pontchartrain and the Mississippi River. The estimated con¬ struction cost is $6,748,805 and with interest charge at 5% for three years, included in the construction costs, the aggregate investment is $7,760,925. The land on the canal available for sale as industrial sites amounts to approximately 2,920 acres and if sold during the first three years at an average price of $2,660, the entire construction cost including interest is returned. If the sales of the land are equally distributed over a 25-year period, an average selling price per acre of $4,100 and for a 40-year period of $5,388 will meet interest and sinking fund obligations, retiring the bonds issued. ROUTE No. 4—Development No. 4-C This development involves the minimum expenditure if the real estate feature of these various plans is maintained and a lock suffi¬ cient for ships of 14 feet draft is provided. The canal (which can at any time be enlarged to a depth of 15 feet or more) is 10 feet in depth with a lock of 15 feet in depth. The aggregate construction cost without interest under this plan is $5,342,233 and if interest charges at 5% for three years during construction are added, the construction costs are $6,143,568. The land available for sale is 2,877 acres and would return the construc¬ tion costs with interest at 5% if sold at an average price of $2,135 per acre during the first three years. If sold during a period of ten years, the average price required to return the construction costs and interest would be $2,425 per acre. ROUTE No. 5—Development No. 5 This development contemplates only the change of location from Route No. 4 and the only modification would be one of real estate cost, a large part of which might be furnished by the United States Government. It might not be feasible, under the Constitutional Amendment, for the State of Louisiana to acquire real estate outside of the Parish of Orleans although the canal and right-of-way were located entirely within the Parish. 14 SUMMARY As stated, our report covers in brief the principal considerations, both direct and collateral, relating to the port's present structures and advantages and the proposed ship canal and terminal. The eight developments have been presented with the plan of making the report as comprehensive as practicable. In summarizing we would mention: 1. That the Port of New Orleans has advantages actual and potential which justify its complete development; 2. That an industrial terminal which is essential to a complete port has not been successfully established in any port except on land having ocean harbor riparian frontage owned uncon¬ ditionally or leased for long periods and occupied by indi¬ viduals and corporations operating the industries; (This ownership is now impracticable within the harbor limits of New Orleans on the banks of the Mississippi River.) 3. That nearly all of the progressive harbors of the world, including Liverpool, Manchester, Hamburg and Bremen in Europe, and especially New York, Boston, Seattle, Los Angeles and Houston in the United States have or are now in process of obtaining, extensive areas for industrial termi¬ nals as a feature of harbor equipment. Even though these developments in some of these ports are not successful financially, they are considered necessary on account of the great benefits to the general port, the state, and the section. Very truly yours, (Signed) FORD, BACON & DAVIS. 15 SUMMARY OF THE DIMENSIONS OF THE CANALS AND LOCKS OF THE DIFFERENT DEVELOPMENTS; ALSO ESTI¬ MATES OF COST, PURCHASE AND SALE PRICES OF LAND, ANNUAL INTEREST AND THE SINKING FUND AMOUNTS NECESSARY TO RETIRE THE BONDS WITHIN CERTAIN PERIODS Developments No. 1 No. 2 No. 3 No. 4 No. 4-A Ship Basin No. 4-B Small Ship No. 4 C Barge Type Barge Barge Barge Barge and Barge Canal Basin and Barge Canal Canal Route No. 1 No. 2 No. 3 No. 4 No. 4 or 5 No. 4 or 5 No. 4 or 5 Land: Right of Way 80 acres 17.63 acres 20 acres 209 acres 469 acres 206 acres 249 acres Industrial Sites 4,231 " 2,920 " 2,877 " Total 80 acres 17.63 acres 20 acres 209 acres 4,700 acres 3,126 acres 3,126 acres Width Over All at Locks 600 feet 600 feet 600 feet 600 feet 1,000 feet 1,000 feet 600 feet • i i t < ' on Ship Basin 1.5 miles 1 mile H U i ' on Barge Canal 300 feet 218 feet 300 feet 300 feet 1.5 miles 1 mile 1 mile Dimensions: Ship Basin — Length 2.3 miles 1.23 miles Bottom Width Top Depth 732 feet 1,000 feet 35 feet 300 feet 538 feet 30 feet Barge Canal- -Length 2.27 miles 5,000 feet 3,000 feet 5.3 miles 3 miles 4.07 miles 5.3 miles Bottom Width 80 feet 80 feet 60 feet 80 feet 278 feet 40 feet 180 feet Top 200 feet 80 feet 60 feet 175 feet 408 feet 158 feet 300 feet Depth 10 feet 10 feet 10 feet 10 feet 12 feet 10 feet 10 feet Total Length Ship Basin and Barge Canal 5.3 miles 5.3 miles Lock: Ship - -Length Width Depth over Sills 850 feet 90 feet 35 feet 600 feet 70 feet 30 feet Barge- - Length 300 feet 300 feet 300 feet 300 feet 350 feet 300 feet Width 50 feet 50 feet 50 feet 50 feet 60 feet 55 feet Depth over Sills 10 feet 10 feet 10 feet 10 feet 18 feet 15 feet Cost of Construction: Without Interest $4,120,137 $6,819,000 $4,534,880 $2,437,046 $13,929,843 $6,748,805 $5,342,233 Including 3 Years' Interest $16,019,319 $7,760,925 $6,143,568 Land Purchase and Sale: Average Purchase Price an Acre $ 9,000 $ 120,500 $ 75,000 I 1,412 $ 575 $ 575 $ 575 Average Sale Price an Acre to Meet Interest and Retire Bonds in 3 Years $ 3,800 $ 2,660 $ ' 2,135 25 Years $ 5,840 $ 4,100 $ 3,293 40 Years $ 7,670 $ 5,388 $ 4,328 Average Number Acres Sold Per Annum to Meet Interest and Retire Bonds in 3 Years 25 Years 40 Years Annual Sinking Fund to Retire Bonds (Construction Cost Only) in 25 Years 40 Years $ 86,317 $ 34,115 S 142,858 $ 56,461 $ 95,006 $ 37,549 51,056 20,179 1,410 acres 169 acres 106 acres $ 291,830 $ 115,339 973 acres 117 acres 73 acres $ 141,387 $ 55,880 959 acres 115 acres 72 acres $ 111,920 $ 44,234 of % Srport To report on the need for, and probable success of, the New Orleans Ship Canal and Terminal, it was necessary to go into the subject much further than simply an estimate of the cost of con¬ struction and the probable business and revenue from its operation. The shipping tonnage which it could be assumed would make imme¬ diate use of a canal connecting Lake Pontchartrain and the Mississ¬ ippi River, and used simply for the co-ordination of lake and river traffic, is so small compared to the possibilities of this undertaking as an industrial basin as to quite overshadow the former. It appeared necessary, therefore, to go beyond a mere study of the lake to river traffic to find and present those facts and data on all of the many phases relating to the subject and which do or do not establish the fact that New Orleans has the actual and potential advantages necessary to attract and support industries which would locate on an industrial basin; also to establish the need for such a waterway in the industrial and commercial development of the City and Port of New Orleans. To cover the field of inquiry fully, this report is divided into ten sections, each section treating of a subject pertinent to New Orleans as an industrial and commercial center, and therefore pertinent to the present inquiry; for if this city and port has, actually, or even poten¬ tially, the basic requirements for large development, then the addi¬ tion of such a facility as this undertaking will undoubtedly be an important element in its success. The following are the titles of the ten sections into which the report is divided: Section I. "The Commercial and Industrial Relation of the City and Port of New Orleans to the Mississippi Valley." This section contains facts regarding the territory which is considered as tribu¬ tary to New Orleans because of transportation, commercial or other advantages; also information on the growth and resources of the City of New Orleans. Section II. "New Orleans as an Industrial Center." This shows the enormous possibilities in manufacturing of all kinds at New Orleans, the cheap fuel; and the surprising list of raw materials in Louisiana, in the Mississippi Valley and in the countries south of here; a large number of which can be brought to New Orleans by water, thus insuring low transportation rates. 17 Section III. "Rail and Water Transportation in Relation to New Orleans." The matter of transportation of both the raw material and finished product is so important to the manufacturers of a city that this section is devoted to the general study of shipping by rail and water—river, ocean, lake and canal. Section IV. "The Present and Proposed Port Facilities of New Orleans and Other Similar Ports." The lack of port facilities, including industrial basins and terminals, is such a handicap to shipping of all kinds that this section is devoted to a study of the needs of a port and the facilities New Orleans is now offering, and may offer in the future. Section V. "Transportation Facilities." The bringing of raw material to the industry, and marketing the finished product, is very largely a matter of the service offered in transportation facilities. This section, therefore, deals with the reaching of markets on the transportation lines—both rail and water—connecting with New Orleans. Section VI. "Transportation Rates Relating to New Orleans and Comparative Import and Export Rates of the Atlantic and Gulf Ports." The competition between different industrial centers in the marketing of their products is influenced largely by the comparative rates obtaining at these points. This is true in both domestic and foreign commerce. This section deals fully with the rate situation obtaining at New Orleans and shows the many advantages enjoyed by this port over many of its competitors. Section VII. ."New Orleans in Relation to Trade Lines and Mar¬ kets." It would be of no value to develop New Orleans as a trading and industrial center unless the output of its industries can be mar¬ keted to advantage. This section reviews the foreign, domestic and coastwise trade in relation to New Orleans, and suggests some new lines which, it is thought, can be largely developed. Section VIII. "New Orleans as a Potential Concentration and Distributing Port and Market of Deposit." Most of the industrial and trading centers of Europe are markets of deposit where large quanities of both domestic and foreign products are brought and stored for future distribution. This section deals with this subject and points out the many advantages New Orleans has for becoming a market of deposit for the products of the Mississippi Valley and the Latin American countries especially. Section IX. "Typical Canals of the World." In this section a brief description and review is given of the more important foreign and domestic canals, some of which are great industrial terminals of the type covered in this report. Section X. "New Orleans Ship Canal and Terminal." In this final section is described the possible routes for the canal, and estimates of costs of construction, and of revenue and expenses. 18 As indicated before, the present inquiry has developed two main questions: 1st. Is New Orleans capable of a large development as a port and as an industrial and commercial center? 2nd. Is an industrial section, located on deep water frontage available for private ownership, essential to the port's greatest development? Answering the first question: It is generally known that New Orleans has, for the last sixty years, enjoyed a steady growth in all of its interests—population; value of buildings; foreign and domestic commerce; imports; exports; postoffice receipts; bank clearings; total capital, surplus and deposits of all banks, and the total valuation of real estate and personal property. It is also generally known that the hinterland of New Orleans—the Mississippi Valley—is one of the richest producing sections in the world. The commercial Mississippi Valley, as included in this report, comprises 21 states or 49.1% of the total area of continental United States. Compared to this it contains 47.5% of the total population: Of the cities of the United States hav¬ ing more than 100,000 population, 30% are situated in the Mississippi Valley; of the total urban population of the United States, 33.3% is contained in cities and towns within this area, and of the total rural population, 59.7%. The center of gravity of population of conti¬ nental United States, for the year 1910, was nearly 50 miles south¬ west of Bloomington, Indiana, which is nearer to New Orleans than to New York via short haul railroad mileage. In 1909 (latest figures available), the Mississippi Valley produced 32% of the manufactures of the United States. In 1914 it had 59.1% of the total miles of rail¬ road in the United States, and about 80% of the total navigable rivers of the country. In agricultural products it ranks very high, as also in mineral and forest products. The immense advantage of New Orleans, and one of the real fac¬ tors in making it a great industrial center, is the nearness of raw products. Nearly all of the raw materials in the United States and the countries south of here are available for New Orleans. The State of Louisiana is rich, especially in materials for industrial chem¬ ical manufactures. Special attention is called to the waterway con¬ nection between New Orleans and the Birmingham district with its great deposits of coal and iron, and its manufactures. No great industrial center has all of the raw materials it uses right at its door; many of them have to transport these materials long distances. New England, for instance, is far from its raw supplies and yet it continues to be the largest manufacturing section of the United States. The great Pittsburg iron industries haul their ore from Minnesota, hundreds of miles away, involving a transfer to a railroad and a rail haul of 150 miles to get it from the Lake vessels to Pittsburg. The Maryland Steel Company, at Sparrows Point, gets 19 all of its iron ore from Cuba. The Bethlehem Steel Company has $10,000,000 of iron ore property in Chili, on the west coast of South America. Hamburg, Liverpool, London, and many other great for¬ eign industrial centers haul their raw materials from all over the world. The raw materials of Louisiana, lying right at New Orleans, may be summarized as follows: Sugar, sulphur, salt, petroleum oil, natural gas, cotton, cotton seed, rice, wood and lumber, sand and gravel, clays, molasses, bagasse, gypsum, lignite, and others of less importance. Close by, and in the adjoining states, are to be found bauxite, man¬ ganese ore, marble, lithographic stone, silica, kaolin, phosphate rock, coal, fuller's earth, and others. Special attention is called to the fact that these are all in short hauling distance of New Orleans, some by water and some by rail, and that they may be utilized in con¬ nection with Louisiana's raw materials or separately for refinement and manufacturing into the commercial article. In the countries south of New Orleans there exist quantities of available materials too numerous to detail here. Especial attention is called to the nearness of the coal supply in the Birmingham district, also to the Pittsburg coal which is brought here by barge. The recent opening of Lock 17 on the Black Warrior River gives a waterway of 6 feet minimum depth 595 miles in length from New Orleans to Cordova, Alabama, which is situated in the heart of the coal and iron district. Coal is valuable not only from the standpoint of a fuel, but for its many by-products. A ton of coal selling at the mines for less than $2.00 has a value in the form of ammonium sulphate of about $60.00 a ton. Experts state that 75% of the coking coal of the United States is found in Alabama. The output of coal in Alabama during 1913 was 15,784,395 short tons; at this rate the supply is estimated by the Government to be good for more than 4,000 years. Louisiana is very rich in oil and gas lands. It is estimated that there are 470,000 acres in this state underlain with oil and gas. In 1914, Louisiana produced 14,677,102 barrels of crude oil valued at more than $11,000,000. The products from petroleum are: naphtha, gasoline, illuminating oil, lubricating oils, vaseline, asphaltum and petroleum coke. Besides furnishing a cheap and highly efficient source of fuel, gasoline may be condensed from natural gas. Sulphur and salt are said to exist in inexhaustible quantities in Louisiana. From these two articles there may be manufactured, on a highly economical scale, a great number of chemicals and by¬ products. Dr. Hays, Chief Geologist of the United States Geological Survey, in speaking of Louisiana, says: "Louisiana, with adjacent portions of Texas and Arkansas, contains extensive deposits of sulphur, salt, limestone, gypsum, bauxite, manganese, oil, natural gas and coal. 20 These are the raw materials on which the principal chemical indus¬ tries of the country are based. Indeed, it is difficult to say in what respect natural conditions could be made more favorable for such industries than in the region lying between New Orleans, Little Rock and Houston * * *. The soda industry alone is worth many mil¬ lion dollars annually to Michigan, Pennsylvania and New York, and it is largely due to the development of chemical industries that Ger¬ many holds her commercial supremacy among European countries." Dr. Day, also of the United States Geological Survey, an expert of the highest standing, has this to say in regard to the resources of New Orleans: "So much more sulphur is known in Louisiana than is being developed as to class the supply among the difficultly exhaustible mineral supplies of the United States. Salt can similarly be classed and the exceptional variety of the salt must also be em¬ phasized. It is therefore little short of inexplicable the way these two minerals have not already lead to the development of great chemical industries in southern Louisiana when backed up by such a fuel supply as an abundance of natural gas and oil. It is not too much to say that there is no known locality in the world where the natural resources are so combined as to make possible the produc¬ tion of sulphuric acid, soda, caustic soda, and similar products at a lower cost than any place on earth * * * and the wealth of southern Louisiana places it in a position comparable with the great chemical centers of Europe, and beyond any other place which could be mentioned in the United States." These experts know the conditions surrounding all the mineral deposits of the United States and foreign countries, and their state¬ ments should carry great weight. New Orleans is already the largest manufacturing center in the South. The output of its factories for the year 1909 (the latest figures available), was valued at $78,794,000. It should be noted that these figures do not include the output of the American Sugar Refin¬ ery, situated just outside the city limits. This factory has a capacity for an output valued at from $30,000,000 to $40,000,000 a year. Besides the industries now located here, consisting of miscellaneous factories, woodworking plants, rice and cotton mills, etc., New Orleans seems to be the logical point for the location of furnaces and steel indus¬ tries, coaling stations and tipples, by-product plants of all kinds, paper mills, flouring mills, building material factories, ship building plants and, especially, industrial chemical plants of all kinds. With the recognition of New Orleans as an industrial center should also come a number of smaller manufacturing concerns and fabricating plants for making up partly manufactured goods for final distribu¬ tion. To take care of these smaller factories, of course, loft build¬ ings will have to be provided, including power, light, water, heat, etc., as is done at The Bush Terminal in New York. 21 As is no doubt understood, New Orleans now offers to shippers a harbor and port facilities second to none in the United States. When the present and proposed improvements are completed, this will undoubtedly be the best equipped port in the United States. As is shown at length in the report, the lack of port facilities and of co¬ ordination with railroads at inland river points, such as Memphis, St. Louis, and other river cities, undoubtedly played a very large part in the decline of transportation by river. It should be noted that many of these ports are now actively installing facilities to take care of this business, which fact will benefit New Orleans. The potential transportation facilities of New Orleans—railroad and waterway—are probably not equalled, and surely not excelled, at any other port in the world. As before stated, while the Missis¬ sippi Valley, as included in the report, comprises only 47.3% of the total population and 49.1% of the total area of continental United States, it has 59.1% of the railroad mileage of the country. It is not possible to give such exact figures concerning the waterways of this section, but it is probably safe to say that it has 80% of the total mileage of the navigable inland waterways of the United States. New Orleans has ten lines of railroads connecting it with the Mis¬ sissippi Valley, north, east and west. The total mileage operated by these roads is 22,376 miles. All of these lines except one consider New Orleans as their primary port, the Southern Pacific alone having terminal facilities at both Galveston and New Orleans. Through all of these connection is had with every railroad of importance travers¬ ing the United States. The Mississippi River, with its tributaries, is nearly 14,000 miles in length. The minimum depths obtaining at all seasons of the year are: New Orleans to Cairo — 9.0 feet Cairo to Pitt-burg up n inrm—ir iriiiwni—m g•" " Cairo to St. Louis— __&0 " St. Louis to St. " St. Louis to Kansas City.... ...„.....»..,_„,...»».,..4.0 " Canalization of the Illinois River between La Salle on the Missis¬ sippi River and the Chicago Drainage Canal at Joliet, authorization of which has lately been made by the Illinois Legislature, will give New Orleans a connection with Chicago about 1,600 miles long with a minimum depth of 8 feet of water. As is generally known, the Mississippi River at one time carried the largest part of the commerce between New Orleans and such points as St. Louis, Cincinnati, Louisville, Memphis, etc., but this traffic has declined greatly, and in 1914 only about 200,000 tons of freight, besides the coal from the Pittsburg district, was brought to New Orleans by river. The several reasons for this decline are as follows: 22 Prior to 1910, the Interstate Commerce Commission had practi¬ cally no control over water transportation. Under this condition, the railroads refused to make through bills of lading with the boat lines; refused to make fair divisions or proportions in combination rates with the boats, and refused to co-ordinate their lines with the boat lines for the delivery of freight between river and warehouse or factory. Besides this the railroads had the right to lower and advance their rates at any point at their pleasure, and the outcome of all this was, of course, the loss of river transportation. Under the present conditions, the Interstate Commerce Commission can force co-ordinaion of rail and water facilities; make fair divisions in the through rates; force through bills of lading on rail and water, and control the stability of the railroad rate, so that the railroads, can not lower the rates to a point under cost of handling, for the simple pur¬ pose of destroying the competition of a boat line. That transportation of freight by water, under modern conditions, is intrinsically cheaper than by rail cannot be gainsaid. But to obtain a low cost requires modern vessel equipment and terminal facilities. Whenever the inland ports awake fully to this fact and provide proper port equipment, open alike to all users, the territory served by the Mississippi River and its tributaries will enjoy lower freight rates than was ever anticipated. In the foreign trade with European countries New York has cer¬ tain advantages in ocean vessel service over New Orleans, but in the trade with Cuba, Mexico and Central America, New Orleans offers very much better service to the shipper than is offered at New York. In the coastwise trade between the Gulf and the Pacific Coast, New Orleans is very backward at present, but it is thought that conditions obtaining now will force a first-class service in this trade, at an early date. The conditions which will force this service are these: Prior to the opening of the Panama Canal, the cities of central United States, Chicago, St. Louis, Kansas City, St. Paul, Minneapolis and other Mississippi Valley cities, shipped their pro¬ ducts for domestic use on the Pacific Coast, and for the foreign trade with the Orient, by rail in comfortable competition with the ports on the Atlantic seaboard, as the water route around Cape Horn re¬ quired so much time and was expensive. Since the opening of the Panama Canal, however, New York, Boston, Philadelphia, Baltimore and many lesser ports have frequent sailings, and at rates very much lower than the trans-continental railroad rates, even since the general decrease of from 5% to 25% lately allowed by the Interstate Commerce Commission. This condition makes it possible for the Atlantic sea¬ board ports to ship their products to the Pacific coast and the Orient at a price very much under the combination rail and water rate obtained via Atlantic seaboard ports from such points as Kansas City, St. Louis, Chicago, Minneapolis and St. Paul. The only alternative for these cities is to ship their products to New Orleans by river and 23 transfer here to a Panama line for the Pacific coast and the Orient. The water rates from New Orleans to the Pacific coast have not, as yet, been established on account of the lack of service in this trade. The railroad rate situation in the entire United States is a very intricate one, no scientific ton-mile basis being possible because of divergent interests. Generally speaking, however, railroad freight rates between points located on navigable waterways are very much less than between inland points even though the inland point haul may be very much less than that to the river point. This, however, is not intended as a criticism of the railroads, as a study of the situ¬ ation does not point out any better system of rates than the com¬ promise basis now developed. But it is intended to fully impress on the interests of New Orleans and the Mississippi Valley that the waterways at their doors are the absolute means of controlling freight rates. The receipts per ton-mile for all of the railroads of the United States for the year 1913 was 7.29 mills; for the Eastern district 6.34 mills; for the Southern district 6.85 mills; for the Western district 8.98 mills. The decrease in these receipts from 1903 to 1913, inclusive, was as follows: 0.34 mill, or 4.46% for all the railroads of the United States; 0.38 mill for the Eastern district; 1.0 mill for the Southern district, and 0.21 mill for the Western district. The receipts per ton-mile for all the railroads of the United States during the year 1880 was 12.9 mills; in 1890, 9.3 mills; in 1900, 7.46 mills; in 1913, 7.29 mills, a decrease in this period of 34 years of 5.61 mills, or 43.5%. It should be noted that the rate of decrease has been very much less since 1900. It was about this time that the competition of the boats on the Mississippi River and its tributaries ceased. During the year 1903 the total freight carried by the railroads of the United States was 173,223,278,993 ton-miles, and in 1913 it was 301,398,752,108 ton- miles, an increase of 128,177,473,115 ton-miles, or nearly 75%, a growth in itself approaching the total traffic for the year 1903. It is also of interest to note that the freight traffic per mile of track has increased 45.6% in this period as against a reduction in receipts per ton-mile of only 4.46%, as noted above. The total tons of freight handled per train and the average tons per car has also increased largely in this period. Products of the mine, general manufactures and forest products are the principal items of railroad freight revenue. These commodities all exist in abundance in the Mississippi Valley for distribution by rail and water. Most of the present rates up and down the Mississippi Valley are based on conditions obtaining during the competition of steamboats, and the railroads are becoming restive under the high cost of opera¬ tion and are attempting to make a very general advance in the rates over this entire territory. For instance, the rate on coal from the 24 Alabama territory to New Orleans has been advanced 15tf per ton, which means an additional cost to the people of New Orleans of about $150,000 a year, based on the one million tons of domestic coal brought in last year from the Alabama fields. The rate on sugar out of New Orleans has been generally advanced, amounting to i