The Tellico project would create new resource assets of a major character to help the area overcome its economic handicaps and speed its economic growth. The principal new factor would be the creation of a navigable waterway to and beyond the point on the Little Tennessee where the L&N Railroad and U.S. Highway 411 cross the river. In addition, the reservoir would provide assured water levels and supplies, thereby making lands along its shoreline ideal sites for industrial development on a major scale. At the same time the reservoir would greatly increase the potenial for recreation use and thus offer the opportunity for new business through tourism.

The large basic industries likely to locate in the Tellico area would be a major addition to the economy of metropolitan Knoxville. Such industries frequently attract secondary or "feeder" industries which may or may not require waterfront sites. Moreover, these industries and their employees would depend on Knoxville for a wide range of services ranging from wholesale and major shopping markets to medical care and entertainment.

DESCRIPTION OF DAM AND RESERVOIR

The Tellico Dam would be primarily an earth embankment with concrete overflow spillway, the over-all length totaling 5,140 feet and the maximum height above foundation being 105 feet. It would impound a reservoir which would be on the same elevation above sea level as the neighboring Fort Loudoun Reservoir and would have a useful storage capacity of 126.000 acre-feet reserved for flood control, somewhat more than Fort Loudoun. Since the two would be joined by a short canal, the effect of the project on flood control would be to more than double the flood storage capacity at this point on the Tennessee River system. In a storm of major proportions in this part of the Tennessee Valley, the existence of Tellico storage could avert several million dollars in damages at vulnerable locations farther downstream on the Tennessee River.

The canal joining the two reservoirs would make the Little Tennessee navigable to commercial tows without the construction of a lock and would increase the power production of Fort Loudoun Dam without the construction of another powerhouse. Tows moving upstream, for example, would use the Fort Loudoun lock and then proceed through the canal into Tellico Reservoir and its waterway. Normally, the flow of the Little Tennessee would pass through the canal and into Fort Loudoun Reservoir thence through Fort Loudoun turbines to generate an estimated 200 million kilowatt-hours of electric energy annually in addition to that now produced at this dam. For purposes of comparison, this is more than half the yearly output of Norris Dam.

PROJECT JUSTIFICATION

TVA estimates that direct transportation benefits resulting from creation of a navigable waterway will amount to $11.4 million. Flood control benefits are placed at $13.7 million and power benefits at $8 million. In addition, the benefits from general economic development, described in detail throughout this statement, are estimated conservatively at $15 million. The total of these benefits is $48.1 million. Net costs are estimated at $31.6 million, made up of a total project cost of $42.5 million, reduced by $10.9 million from land sales in future years. The project thus has a cost-benefit ratio of 1.5 to 1.

INDUSTRIAL SIGNIFICANCE

To appreciate the economic significance of the Tellico project it is important to realize the shortage of adequate large industrial sites along the Tennessee waterway in this part of the state. East Tennessee topography is rolling to steep and relatively level land needed for the economical construction of industrial plants is scarce. Moreover, where such land is available, it frequently is far removed from rail or highway transportation. Often it is marked by outcroppings of rock which would make construction more expensive.

The Tellico Reservoir would bring commercial water transportation to several thousand acres of level to rolling land which would also have ready access to the rail and highway transportation noted above. The areas involved would be much greater in size and offer more favorable topography than anything now available for development on the uper main stream of the Tennessee. These sites would thus have the combination of characteristics which has attracted

major industries wherever they exist together in the Tennessee Valley. There are seven such locations on the Tennessee waterway-Calvert City, Kentucky; New Johnsonville, in western Tennessee; Muscle Shoals, Decatur, and Guntersville, Alabama; and Chattanooga and Calhoun in eastern Tennessee. Private industry has invested over a billion dollars in new and expanded plants along the waterway since its completion 20 years ago and by far the major share of it has occurred at locations such as these. These industries directly employ about 33,000 persons.

Based on this experience, TVA estimates that private companies could be expected to invest as much as $265 million in new industry in the Tellico area over the next 25 years. Such an investment would provide jobs, directly or indirectly, for some 6,600 persons and increase incomes from wages and salaries by $18 million a year over that offered by present employment opportunities.

TVA anticipates that these industrial sites would be attractive to manufacturing operations which, in addition to usual requirements, have inputs of raw materials that are bargeable and have a large enough use for cold, industrially pure water to require an abundant supply.

RECREATION POTENTIAL

In addition to its industrial opportunities, the Tellico Reservoir would have a highly useable shoreline permitting extensive use and development for recreation. The water quality of the lake would be excellent and therefore conducive to all water contact sports. Fluctuation of the water level would be insignificant and the cycle would be such as to favor recreation use or development. Local road access into he project area is very good, perhaps better than on any previously built TVA reservoir. The lake, in size and surrounding environs, will present an extremely attractive body of water to recreationists. It will undoubtedly be one of the most beautiful of the Valley lakes.

Headwaters of the lake would be immediately adjacent to the Great Smoky Mountains National Park, the most heavily visited national park in the Nation, where access between the park and reservoir will be provided by the foothills parkway, now nearing completion. Cherokee National Forest, rapidly becoming a recreation destination, would form a part of the shoreline of the lake, offering additional recreation opportunities. The North-South Interstate Route 75, which passes within a few miles of the proposed dam, would bring travelers from the populous North and also from the Atlanta vicinity. Interstate Route 40, which intersects Interstate 75 near Knoxville, would feed visitors into the area from the eastern states and from the Midwest. Existing roads now link the project area with the Blue Ridge Parkway, long a major North-South tourist route.

A study of the recreation use of TVA reservoirs since 1947 shows that recreation use continues to increase on existing reservoirs despite the addition of new lakes, but that the rate of increase is more rapid on the newer projects. Recreation use of TVA's main stream reservoirs-and Tellico would have the characteristics of a main stream reservoir-has increased nearly sevenfold over the past seventeen years. Recreation use on the Tellico Lake should increase at a rapid rate, eventually exceeding the average use of main stream reservoirs. TVA estimates that such use would reach 1,750,000 visitors annually within ten years after completion of the project. To accommodate this growth, it is estimated that private investment in shoreline developments would total some $5 million within 10 years or less after completion of the project.

A large share of this investment would occur as a result of improved habitat for fish and more extensive fishing. Prior to the completion of TVA's Fontana Dam in 1944, 60 miles upstream, the Little Tennessee was an average east Tennessee bass, catfish, walleye, and sucker stream. Fontana stores a sufficient volume of cold water to sustain trout water temperatures downstream throughout the summer. Thus, while trout in the section of the Little Tennessee below Chilhowee Dam do not reproduce naturally, trout fishing can be maintained by stocking hatchery-produced fish. The Tennessee Game and Fish Commission has undertaken to stock the stream for several years. Fishing for trout below Chilhowee Dam now occurs primarily in a stretch of the stream extending eight or nine miles below the Dam.

In the early stages of project planning, estimates showed that such sport fishing trips generate an annual business of about $25,000 in the Tellico project area. There are indications that this rate has since been increased by intensi

fied publicity and trout stocking. For example, the Commission stocked the stream with more than 730,000 trout of various sizes in 1964-65, at an estimated cost of $90.000. By comparison, only 74,000 trout were stocked in 1963.

A recently completed survey indicates that even with this increased stocking, current economic benefits derived from fishing on the Little Tennessee fall short of its potential if developed as a lake. The survey, conducted by the U.S. Fish and Wildlife Service in cooperation with the State Game and Fish Commission and TVA, found that fishermen made some 29,350 trips to the Little Tennessee between June 22, 1964 and June 20, 1965. More than 90 percent of these fishermen were Tennessee residents and lived within 40 miles of the area. They caught about 65,000 fish-70 percent of which were trout-and spent about $74,000 in the process.

With the Tellico impoundment, trout fishing could be maintained in the first few miles below Chilhowee Dam with the possibility that it could be developed throughout the reservoir. Opportunities for fishing of other types throughout the entire reservoir would be enormously increased. Fishing for sauger, bass, and crappie would be many times greater and TVA estimates that fishing trips would grow to 165,000 annually-over five times the present use.

Tellico Lake would have many recreation uses other than fishing. It would have a good many miles of shoreline suitable for a wide range of activities from outdoor camping to pleasure resorts and including sites for parks, homes, and cabins.

Present opportunities for hunting waterfowl, chiefly ducks, would not be diminished and could be increased by appropriate use of the shoreline for waterfowl food production. Hunting of wild boar and other game in the area would not be affected.

HISTORICAL SITES

The Little Tennessee valley in this area holds some historical interest. In pioneer days a number of Cherokee villages occupied locations along the bank of the stream. These sites have never been systematically excavated or restored. Today they are only fields in privately owned farms. TVA proposes to make arrangements as it has in the past with the University of Tennessee, the Smithsonian Institution, and the Department of Interior for archaeological investigations of those sites which would be inundated to probe their historic significance and preserve important artifacts.

The Valley was also the site of a fort erected by the British in 1756 during the colonial struggle with the French for the Great Mississippi Valley area. Although its life as a fort was short-it was abandoned in 1760-it was the first English fort west of the Appalachian Mountains and a local society, the Fort Loudoun Association, has been formed to preserve and restore it. This work now has been partly accomplished. TVA proposes to preserve the site and is working with the Fort Loudoun Association and the State of Tennessee to make sure that it is done in a way that will convey the historic significance of the fort to the maximum number of people.

SHORELINE LANDS

TVA believes the Tellico project will contribute greatly to the industrial development of the area and proposes to follow a land acquisition pattern which will assure that sites needed for industry are reserved for that purpose. The amount of land acquired by TVA for the project is expected to be about twice the area inundated, as has been the case in most other reservoirs. However, advance planning will assure a more effective use of the shoreline lands than in the past. Plans for the use of these lands will be developed in full cooperation with state and local officials to insure that sites best suited for industry are not dissipated for less vital purposes and that there are adequate provisions for public and private recreation, homesites, and other purposes.

The plan to acquire key lands for industrial and recreational development and resell them as demand for such property increases reflects the public purpose of the project in meeting the serious need for measures to speed growth in employment and general economic development in this part of eastern Tennessee.

Proceeds from the sale of lakeshore lands, presently estimated at $10,900.000, would be returned to the U.S. Treasury as an offset against the cost of the project. The amount of local taxes involved in land to be purchased by TVA for the project would be minor relative to total county revenues (Monroe County, 3

percent; Loudon, 1.75 percent; Blount, 0.034 percent) and would be replaced entirely by a combination of direct TVA payments in lieu of taxes and state sharing with the counties of a portion of TVA's payments in lieu of taxes to the Tennessee state government. All land later sold by TVA for industrial or recreational development would, of course, return to the local tax rolls, undoubtedly with a higher tax valuation than at present.

In order to achieve the greatest benefits from the shoreline lands, TVA has evolved over the years methods of working with state and local governments in the adjustment, planning, and management problems which result from the reservoir.

To provide a basis for determining how the land should be used and the most appropriate agent for sound development, TVA has joined with state and local governments through their planning agencies on studies of the reservoir and adjacent areas. Tellico studies will include analyses of land use needs in the surrounding region and the preparation of plans for the use and development of the reservoir and its shorelines. Provisions will also be made for the general identification of land best suited to recreation, residence, commerce, industry, and the utility services needed in the area, and specific developmental proposals for key public facilities.

In summary, the Tellico project with its unique features permitting reservoir operation for flood control and power generation in tandem, as it were, with Fort Loudon Reservoir; with its navigable waterway opening up extremely valuable new industrial sites; and with the beauty of its natural surroundings enhancing its recreation value, would make a major contribution to the remedy of chronic economic ills in the region.

Mr. DINGELL. I would see to my good friend that the Chair has made a number of requests, particularly dealing with particular portions and requirements of the Fish and Wildlife Coordination Act that you would regard as unduly burdensome in terms of compliance.

Mr. SMITH. Those are the specific types of information plus the request made by Mr. Lennon about our record of our contacts with the North Carolina Game and Fish Commission, which I will try to immediately supply. I would suggest that, if there are any further questions after they are submitted, that I could be asked to supply anything that I have omitted.

Mr. DINGELL. The Chair will certainly cooperate on that.

(Discussion off the record.)

Mr. DINGELL. Without objection, then, the committee will stand adjourned until 10 o'clock Friday.

(Whereupon, at 12:20 p.m., the committee was recessed, to be reconvened at 10 a.m. Friday, May 13, 1966.)

65-204-66-pt. 1—12