Business: The Intracoastal Waterway

AMONG the world’s great waterways the mighty Mississippi, Germany’s strategic Kiel Canal, the vital Panama and troubled Suez are all familiar names. But one waterway with more importance than fame is a muddy, undramatic complex of barge canals and shallow channels rambling 1,116 miles around the U.S. Gulf Coast from Brownsville, Texas to St. Marks, Fla. It is the Intracoastal Waterway, tying the entire Gulf Coast area into the nation’s vast, 28,000-mile system of waterways. For Southerners it is a chief reason for the greatest boom in Gulf Coast history. As one rhapsodic Texan put it: “A shining strand linking together the jewels of progress into a fabulous necklace along the curving bosom of the Gull.”

Not even Texas tall talk can exaggerate the waterway’s real importance. Enormous industries today stand bound together by a water highway carrying 41 million tons of freight some 7 billion ton-miles annually—more tonnage over a greater distance than either the Kiel or the Panama Canal. Touching every major Gulf port, it has helped boost New Orleans into the nation’s No. 2 seaport, transformed Houston from an inland city into one of the busiest U.S. ports, handling $500 million worth of waterway cargo alone last year, including everything from autos to seashells. The waterway has also opened up the Gulf’s vast natural resources at bargain-basement prices. By using strings of heavily laden barges, businessmen can ship goods north and south at rates anywhere from 20% to 50% cheaper than by rail or truck. The saving, says the U.S. Corps of Engineers, which built the waterway, amounts to a whopping $83 million annually, more than the entire $65 million construction cost since the canal was first started in 1907.

The 40-year Fight. The man who gets credit for pushing the waterway to completion was a pioneering Victoria, Texas banker named C. S. E. Holland, who spent most of his life fighting for a cheap way to carry the Gulf Coast’s raw materials north in return for needed manufactured goods. Forming the Intracoastal Canal Association with the help of another hard-driving businessman named Roy Miller, he badgered a reluctant Congress into shelling out funds over a period of 40 years, first for a short, 53-mile strip in Louisiana barely 40 ft. wide, 5 ft. deep, later for a 9-ft. channel stretching into Texas. By the time Holland died in 1945 (Miller died in 1946), all but a final 140-mile section in Texas was finished; the waterway was 125 ft. wide and 12 ft. deep along most of its length, completely fitted out with locks, flood-control dams and side canals running up to important inland cities.

No one has ever regretted the expenditures. The Intracoastal Waterway more than paid its way during the bitter U-boat warfare of World War II, when the U.S. used it to transport 90 million tons of vital supplies, safe from preying U-boats in the Gulf. But the Waterway has really proved its value in peacetime. At least 500 companies (among them: Reynolds Metals, Alcoa, Monsanto, Dow Chemical) have built plants and warehouses along its banks, while thousands of others use it for cheap transportation. One enterprising Texan has built up a booming business carrying truck trailers up and down the canal by barge, thus eliminating dockside loading and speeding up the delivery of goods to inland points. To compete with low-priced local brews, Milwaukee’s Schlitz floats 8,000-case bargeloads (equal to 45 boxcars) to Houston by inland waterway from the Great Lakes, saves 40% on transportation costs. Most of the oil industry’s steel drilling pipe comes in by barge at $9 per ton v. $17 per ton by rail. The savings are so impressive that Union Carbide & Carbon has dredged a nine-mile cut to the waterway to ship goods from its chemical plant at Seadrift, Texas, while Chemstrand Corp. dredged a 22-mile channel near Tallahassee, Fla., to give its huge nylon plant access to it.

Oil in the Marshes. The biggest waterway customer of all is the booming Gulf Coast oil industry, which last year shipped out some 25 million tons of petroleum products, more than half of all the waterway’s traffic. From New Orleans’ Harvey Lock southward, the water is lined solid with oil activity—war-weary landing craft being converted into tenders for offshore drilling rigs, big yards piled high with pipe, well-cementing companies, plants where the giant offshore rigs are fabricated. At intervals, veinlike side canals branch off into the marshes, where oilmen have dredged passageways to float equipment into their fields and float oil barges back from the wells. Virtually every big company has fields, tank farms, refineries along its banks clear down to Corpus Christi—Texas Co., Standard Oil of N.J., Superior Oil, Magnolia, Kerr-McGee Pure Oil, Cities Service, Shell Oil, Gulf, Humble Oil.

This year alone 22 companies will either build or expand plants along the waterway. Reynolds Metals is expanding; so is Alcoa, with a new $45 million aluminum plant at Point Comfort, Texas. Estimates are that the surging chemical and petrochemical industries will shoot up 70% by 1960, and the Gulf Coast will get much of the expansion. Texas alone will add $260 million worth of new plants in the next two years. Firestone Tire & Rubber is building a huge chemical plant at Orange, Texas; Dow Chemical is expanding its Freeport. Texas plant by $45 million, while Gulf Oil, Foster Wheeler Corp., Lake Charles Chemical Co., Buckeye Cellulose Corp., Coastal Chemical Corp., Union Carbide & Carbon are pouring in millions more for new facilities along the waterway from Florida to Mexico.

Mexico to Massachusetts. Besides new industry, the waterway is also bringing a rising tide of vacationing yachtsmen, fishermen and hunters to the Gulf’s marshes, bayous and beaches. Padre Island, for example, which stretches for 115 miles along the Texas coast, has been connected to the mainland by causeway, while the waterway makes it increasingly possible for yachtsmen to reach the island. One 24-unit motel is already operating at 100% capacity on Padre, and a developer has sold $760,000 worth of lots for summer houses. Last week a second $500,000 resort was abuilding, and a lavish, $250,000 sportsmen’s club with hunting preserves in nearby Mexico was going up.

The waterway promoters have big plans for the future. One dream is to extend it down the Mexican Coast to Tampico and Veracruz. Another is to cut a 160-mile cross-Florida canal to connect the Intracoastal system with the Atlantic Inland Waterway, thus creating a sheltered, 2,500-mile passage from Mexico to Massachusetts. Though Congress has authorized the cross-Florida extension, it has been reluctant to appropriate the necessary $87-108 million. But the waterwaymen are sure it will come some day. Says Dale Miller, executive vice president of the Intracoastal Canal Association and son of Co-Founder Roy Miller: “When we connect the Atlantic Inland passage with the Intracoastal, the real usefulness of both waterways will come into being.”