Columbia Missourian Newspaper 1966-07-11

              Tall Increase Likely Eler Ff a St St. Laurence St- St WEI uHa Seaway ay calla Busy in iii a Sea of o Red Ink SEA LEVEL a By Ralph C. C Deans OTTAWA UPI The St. St Lawrence Seaway as lie busy bwy as it appears to be is ts sinking slowly but inexorably into a sea of 01 red ink look Its Ita financial troubles have become 00 so acute that its original backers the bickers the US U.S. and Canadian governments must governments must make an agonizing reappraisal this year of ad the me million venture The two countries built the tie inland waterway in Lt 1959 with Canada Canida taking on about 70 10 per percent percent percent cent of the cost At the last 1St reckoning the up plied debt against the seaway had hut reached a s staggering million minion not including the wholly Canadian Canadian- owned Wetland Welland We nd Canal another 58 53 53 million down Despite these discouraging figures champions of the seaway maintain that it has become a major m jor transportation trans tion artery for both countries and that it can compete with the railroads in transporting goods to and from the Atlantic seaboard S e e t o oThe The waterway allows ships to penetrate from the Atlantic to Duluth at the western tip of Lake Superior It has bas opened up 2300 miles of inland shipping and connected the industrial heart of cf North America with the shipping lanes of the world Through the seaways seaway's 15 locks pass ponderous lakers V 4 oi of rf a mile mUe long and freighters steaming in from virtually every seagoing nation Increasingly every year mil mil- millions lions Bons of tons of raw materials and lind finished products slip down from the Great Lakes destined for every part of the globe Millions more tons are lifted up into the die dynamic core of Canada and the United States Each Earh year the seaways seaway's significance grows and its impact on the two economies increases Each year it handles more ships more cargo becomes more efficient and does a better job of moving goods Each year it loses lose more money the detractors point out e 0 9 0 Despite constant improve improve- improvements improvements ments the seaway is more moreco costly co to operate and does less leis business than the two countries thought it would when they gave construction companies the green light to ta begin gouging gauging out the foot deep channel in 1954 Interest charges s on the original investment are gob gob- gobbling gobbling bling up profits and plunging the seaway into deeper and deeper financial hot water The situation became came aggravated recently when Canadian work work- workers workers workers ers won a new contract giving them a 30 per cent increase in wages This will skim an additional 2 million a year yew off the operations operation's profit margin The jointly owned Montreal- Montreal Lake Ontario section of the tha seaway grossed a record million during 1965 Nearly 44 million tons of goods were transported through the locks After paying paving pa ing out 44 million on operating expenses the section wound up with a tidy profit of over 11 million But Butmore Butmore Butmore more than 15 million bad had to be paid out in interest charges on the original debt and the section finished the year nearly 4 million in the red S S i Faced with spiraling costs the seaway authority in Canada and the St. St Lawrence Develop Develop- Development Development Development ment Corp in the United States Slates ran a study which came up with a recommendation that tolls be increased It was hoped an increase of about 10 per cent would result in putting the seaway on a sounder financial footing and help to pay payoff off the capital debt and meet the interest charges on that debt The study recommended that thata a toll should be re-instituted re on the Canadian Welland WeIland section of the seaway which lifts ships from Lake Ontario on a mile 27 route around Niagara Falls into Lake Erie The Welland WeIland has been free to shipping since 1962 when tolls toUs were suspended Virtually every interest with witha a stake in Great Lakes shipping and there are hundreds of them th m in Canada and the United States States has has thrown up violent opposition to both proposals If II IIan anything an thing they contend the seaway should reduce its tolls so the benefits of or free inland shipping could be passed on to the consumers of both nations 9 a e 0 e o eThe oThe The forces lined up against the suggested toll increase range from shipping compa compa- companies companies companies nies import export firms news news- newspapers newspapers papers and steel mills to farmers and consumer They argue that toll toU hikes hike would deter ships from using the seaway and add to the tha consumer cost of goods trans trans- transported transported transported ported upon it The seaways seaway's study on the theother theother other hand reported that even evena a 20 per cent increase in tolls would not cause a significant slackening of traffic Suggestions Sug have been made mads madson on both sides of the border that the governments should simply appropriate the necessary mo mu money money ney nay to pay payoff off the seaways seaway's debt and return to North Americas America's historical position of toll free toll free waterways It appears certain that the tho two vo countries will have to come coma up with a radically new plan to finance the venture if they turn tura turndown turndown down the suggestion to increase tolls As it is the seaway can not net pay for itself and at the same sarno time make inroads on its it constantly increasing debts It was originally planned that the seaway would pay for itself 50 Costs Costa over a year 50 year ear period and profits were projected over this period and it was decided the seaway would be clear of debt and perhaps making substantial profits by the year 2009 C o o But the rosy fOY optimism of the 1958 study paled in the light of experience As an example of how far the figuring went astray the seaway was 60 6 million more in debt at the ilie end of 1965 1985 than anticipated by accountants seven years pre pre- Officials here will not speculate late on what action the government might take But placed highly sources in the St St. Lawrence Seaway Authority admit privately that the government has little alternative alternative alternative tive to increasing the tolls a s 0 s While the St. St Lawrence Lawrenc Seaway is the only tolled inland waterway in North America its toll structure compares favora favor favorably favorably a- a bly with those on the Panama and Suez Canals In a cost comparison run by bythe bythe bythe the authority an ocean cargo liner fully laden with mixed cargo can get through the St. St Lawrence for about 75 15 cents per cargo ton It would cost tho the same ship 87 cents per cargo ton to travel the Panama and 96 98 cents per ton to steam through the Suez While the costs vary according accord accord- according according ing to the size of the ship and the type of cargo it is generally accepted that the tho seaway is a t bargain for f Even with a ti 10 16 per Pel cent increase the ton per toll oa on most goods would woold best that charged by other shipping lanes oa o 0 c 0 0 Pierre Came Camu president of cf tOO the Canadian Authority has said that thit the increases would amount mount to less than 50 cents on ona ona ona a European automobile shipped into tha the United States or Canada The increased cost to wheat would amount to third one of a cent per bushel and 11 cents par per ton b n for far iron ore Despite the seaways seaway's ays ay's shaky financial underpinning Camu for one believes it could still become a self-paying self operation with the toll ton increase The financial imbalance as an it now BOW exists blights th the tho seaways seaway's true success U ess story story Camu maintains It has demonstrated its flu ability to compete with alternative alternative alternative tive means of transportation It should need no subsidy t to te continue to do so aG