Federal Barge Lines Helped Spawn Modern River Industry

A lump of coal is considered a lousy Christmas present. About a century ago, though, thousands of Americans would have been very happy to find a lump or two or three in their stockings.

The disastrous winter of 1917–1918 had caused death and mayhem in the Ohio and Mississippi valleys and across the country. Frozen rivers, a world war in Europe, and a failure of railroad capacity had created a deadly shortage of coal for home heating as well as for power generation and transportation.

After that fiasco, and once the war ended on November 11, 1918, the federal government got serious about improving waterways transportation in order to augment the country’s inadequate railroads.

The rise of railroads shortly before the Civil War had changed transportation in the United States at the expense of steamboats. Rail had the advantages of speed, direct service and reliability in almost every kind of weather throughout the year. River freight service was unable to recover in the years after the Civil War.

Even before the turn of the 20th century, farmers, consumers, shippers and government leaders were concerned about the lack of competition in freight and commodity transportation. A federal effort to revive the inland waterways began in 1876 when President Ulysses S. Grant signed the Rivers and Harbors Appropriations Act. In 1879, Congress created the Mississippi River Commission to work on redevelopment of Mississippi River navigation.

In 1907, President Teddy Roosevelt appointed a panel, the Inland Waterways Commission, to prepare a comprehensive plan for improvement of the nation’s waterways. The commission made a number of recommendations to improve waterways and infrastructure.

Government Barge Service

But the real rebirth of river transportation began after the 1917–1918 winter. During the world war, the federal government had taken over the railroads. In May 1918, Midwestern and southern businessmen appealed to William G. McAdoo, the government’s director general of the railroads, to use his authority to also establish a barge line with federal money. McAdoo appointed a committee to look into it. The committee advised the establishment of barge lines on the Lower Mississippi and on several of the rivers of Alabama.

This was done very quickly, and by September the line was in operation with a small number of barges and towboats belonging to the Army Engineers. The government had in mind that the barge service would only last for the duration of the war, but the war ended only two months later.

River cities wanted to have the experimental service continued, though, and their wishes prevailed. A more permanent Inland & Coastwise Waterways Service was established, housed in the War Department. Privately owned boats and barges on the Mississippi and Warrior rivers and on the New York State Barge Canal (the old Erie Canal) were commandeered. Weekly river service between St. Louis and New Orleans began.

The experiment was expensive, at least at first. The Inland and Coastwise Waterways Service lost nearly a million dollars a year from 1920 to 1924. But Congress had been adamant in the Transportation Act of 1920, declaring it to be “the policy of Congress to promote, encourage and develop water transportation service.”

In 1921, Missouri was first on the list of states benefitting from the barge service. Tennessee was second, and Illinois third. The tonnage numbers were tiny by 21st-century standards, a total of fewer than 250,000 tons of exports by all the states served by the river system. Wheat was the top export product, followed by corn and cotton.

One curious aspect of the federal barge service was that it included “less-than-bargeload” service—in other words, small shipments of packaged freight in addition to bulk commodities. In September 1922, for instance, the first Mississippi-Warrior Service barge was eagerly anticipated at Pascagoula, Miss., with a cargo of merchandise from New Orleans destined for local retailers.

Inland Waterways Corporation

In June 1924, Congress changed things up in order to put the federal barge service on a more businesslike footing. The Inland Waterways Corporation Act created the Inland Waterways Corporation, set up in the style of a private business, but with the federal government providing all of the capital. The new government corporation in turn created the Federal Barge Line to operate on the Mississippi, Missouri and Warrior rivers. This was not going to be just a few Army Engineers’ boats, but a whole fleet of towboats and barges.

By 1927, the corporation had service from Minneapolis and St. Paul to St. Louis, from St. Louis to New Orleans, from New Orleans to Mobile, and from Mobile up the Tombigbee and Warrior rivers to Birmingport, Ala. From that point it owned and operated a terminal and railroad service serving Birmingham.

Federal Barge Line service on the Upper Mississippi was inaugurated in 1927. Four new 600 hp. towboats were used—the S.S. Thorpe, C.C. Webber, John W. Weeks and General Ashburn. The 500-ton barges they pushed were loaded light because the 9-foot channel had not been created yet.

From the start, the barge line worked to provide a schedule that shippers could depend on. In 1928, there were two boats a week upstream from St. Louis and two downstream. The northbound trip took eight days; southbound was six days.

There were only three locks at that time—at Keokuk, Moline and LeClaire.

As more towboats and barges were added, the Federal Barge Line was able to increase its schedule until daily departures were made from St. Louis and St. Paul.

An operation like this added to the barge line’s red ink, because political pressure caused the service to operate on the Upper Mississippi before channel improvements had been made to allow loading barges to a profitable depth.

Completion of the 26 locks and dams between Minneapolis and Alton did not happen until the end of the 1930s.

Coal, oil and grain became the major cargoes transported by Upper Mississippi towboats. Coal and oil were important from the start as upstream cargoes. Grain eventually developed as a downstream cargo, but there was railroad competition.

The Industry Grows

It wasn’t until the completion of the 26 locks and dams assured a 9-foot channel that the Federal Barge Line, along with a number of private companies entering the trade, were able to bring the value of annual tonnage above $1 million. Some oil companies began operating their own boats. Others employed common carriers to bring their liquid products upstream to the tank farms that began to spring up. These tank farms supplied gas and petroleum products for river communities where they were located. Oil trucks also carried gasoline inland to communities far from the river.

By the early 1930s, the New York Times was reporting that “Old Man River is humming again. In the last few years, he has been carrying more of the nation’s commerce than ever before, more than in the palmy days of Mark Twain’s piloting before the Civil War, more than in the revival of river traffic of the ’70s and ’80s. Steamboat whistles are now heard daily on rivers that were almost silent from 1912 to 1920.”

On the Ohio and the Lower Mississippi, a 9-foot channel was open all the way from New Orleans to Pittsburgh, complete with lights and other markers. It had become common to see a towboat pushing six to a dozen barges, each carrying 1,000 tons of coal. Some barge shipping rates by this time were as little as one-tenth the cost of shipping by rail. River transport in general was saving from 10 to 25 percent compared to all-rail rates.

In 1935, the first through all-water barge service between New Orleans and Kansas City was inaugurated by the Federal Barge Line. On May 18, a barge left the Galvez Street Wharf laden with burlap, canned goods, coffee, sugar and other commodities. The barge was scheduled to arrive at St. Louis on June 4, and then wait for more barges from Chicago and Minneapolis. On June 7, the completed tow was to head up to Kansas City. The 6-foot channel between St. Louis and Kansas City had just been completed. Before that, barge cargoes from New Orleans had gone to St. Louis and were transferred to rail to continue to Kansas City.

In 1937, the barge line was advertising full schedules on the Lower Mississippi (15 days up, 7 days down), Upper Mississippi (8 days from St. Louis to Minneapolis, 6 days down), Illinois (4 days each way between St. Louis and Chicago), Missouri (4 days to Kansas City, 2 days down), and Warrior (7 days from New Orleans to Port Birmingham, 4 days back).

Railroad Competition

Railroad interests objected strongly to the government barge service. In fact they fought it tooth and nail, including with what river advocates called discriminatory rate-cutting. For example, the rail freight rate on sugar from New Orleans to Chicago, a distance of 900 miles, was lowered to 28 cents per hundredweight, while the rate from New Orleans to Kansas City, 866 miles, remained at 65 cents. The reason was that the railways had barge competition on the route to Chicago, but not to Kansas City.

In a 1934 editorial in The Waterways Journal, Donald T. Wright argued that railroads had lost traffic to motor truck and even air transport lines rather than to inland waterways. “If all river and canal operations were terminated right now,” the editor argued, “railroads would be no better off. In fact, they would be worse off, because these operations are a benefit rather than an injury to the railroads. They are especially designed to complement and augment rail traffic.” Wright pointed out that the Federal Barge Line had developed new traffic sources, including cotton, sugar, grain, and sulfur, and that the railroads had reduced their rates to get this traffic, with resultant reduction of income.

Some of the railroad executives, however, supported river developments. As far back as 1907, veteran railroad builder James J. Hill warned his railroad colleagues against seeing inland waterways as rivals, saying the “future of the waterway is assured, not so much as a competitor but as a helper of the railroads.”

Government leaders and industrialists like Hill were looking at the bigger picture. At this point in the first half of the 20th century, ocean transportation between the East and West coasts was actually less expensive than land transportation from the middle of the country to the population centers on the Atlantic Coast. Lumber from Washington and Oregon, for example, was being shipped to the East Coast via Panama cheaper than lumber from the interior states could be shipped by rail. In the other direction, farm implements manufactured at Moline, Ill., shipped by rail to the West Coast would pay $1.86 per hundredweight. Rail to Baltimore and then by ocean steamer would go at the rate of $1.10. Now, with Mississippi River barge service available, the same shipment from Moline to New Orleans and then by ocean steamer would be at a rate of only 65 cents.

By the mid-1940s, the Federal Barge Line had at least 30 boats operating on the Mississippi River, ranging from 600 to 2,400 hp. There was a fleet of 1,000-hp. boats on the Upper Mississippi with names like Mark Twain and Huck Finn. The 2,400-hp. state series—the Illinois, Iowa, Minnesota, and Missouri—worked on the Lower Mississippi.

Privatization

As the mid-century mark approached, the Federal Barge Line faced a problem. Its fleet was aging and in need of major refurbishment or replacement. In January 1948, the Inland Waterways Corporation told the Truman administration that “continued operation of the present equipment will not only inevitably result in large annual losses but will very shortly result in rapid curtailment of operations on account of the forced retirement of inoperable equipment.”

Proposals to spend tens of millions of dollars in public money to keep the barge line going only brought more criticism from opponents, including the railroads. In February 1948, J.H. Parmalee, vice president of the Association of American Railroads, testified to the House Commerce Committee on behalf of legislation to sell the Federal Barge Line. Parmalee called the Inland Waterways Corporation a “socialistic experiment,” and asked Congress to “get the government out of the barge business.”

Three or four years of public debate ensued. The strongest proponents for keeping the barge line and spending money to refurbish its fleet came from the New Orleans area. The Louisiana congressional delegation, led by Sen. Russell Long, teamed up with the Port of New Orleans and other business groups to do battle with the railroads as well as with business interests in areas not served by the barge line.

In the end, there was not enough congressional support to spend millions of public dollars to revamp the Federal Barge Line. In December 1953, the Interstate Commerce Commission approved the sale of the barge line for $9 million to a new company in St. Louis called Federal Barge Lines Inc., which was controlled by the St. Louis Shipbuilding & Steel Company, which was controlled by Herman T. Pott.

A subsequent generation of river mariners worked for Federal Barge Lines, with an “S” on the end, but it was not exactly the same as the old government-owned Federal Barge Line without the “S.” The company name and the various Federal Fleet locations lasted for decades.

In the end, the barge line may have been a victim of its own success. It had blazed a trail to revitalize traffic on the Mississippi River system, and had created a business that was so valuable, private interests wanted to buy it.

If the Federal Barge Line was a “Christmas present” for shippers and river towns and consumers in the early 20th century, perhaps instead of a “lump of coal” it was more like the proverbial fruitcake. Some people loved it, some people hated it, but in any event it lasted quite a long time.