250 MULTIPLE PURPOSE RIVER DEVELOPMENT 



carbon requirements of a reduction mill of 40,000 tons of annual 

 capacity, the differences in transport costs would approximate 

 $103,600 annually between the alternative locations.^^ 



Finally, differences between the freight bills of the two locations 

 would appear in connection with moving the metallic aluminum 

 from reduction mills to markets, or to fabricating centers located 

 with reference to major markets. Only a relatively small amount of 

 fabricating capacity is in the Northwest — at Spokane and Vancouver 

 in Washington. A small amount of additional capacity is located 

 in Vernon and Los Angeles in California. Some capacity exists in 

 other parts of the West, such as Phoenix, Arizona. But rail rates 

 to these locations are roughly comparable to those on movements 

 all the way to the Midwest.^^ Much of the metal produced in the 

 Northwest actually will move to the eastern part of the United 

 States at freight rates greatly in excess of those for an Ohio Valley 

 location.^5 Consider then, freight rates on metal produced in the 

 Northwest to average about $20 per ton as compared with an esti- 

 mated $10 per ton on metal produced in the Ohio Valley. A differ- 

 ence in the annual freight bill on aluminum pigs and ingot 

 shipments would amount to about $400,000. 



If we assume no differences in processing costs, the sum of 

 increased transfer costs — involving both assembly of raw materials 

 and distribution of processed output to markets — would approxi- 

 mate $762,000 annually, leaving the Northwest reduction mill a net 

 locational advantage of only $138,000 of the original $900,000 sav- 

 ings on power costs. Taking this into account, what is the regional 

 locus of the ultimate gains from the federally developed hydro- 

 electric feature of the project? 



The proportion of the total output assumed to be available from 

 the hydroelectric site for sale to the electro-process industries would 



Detroit; Woodward and Fairfield, Alabama; Ironton, Ohio; and St. Paul, 

 Minnesota. 



" These estimates assume a transport rate of $8.50 per ton on petroleum coke 

 from Wilmington to the Northwest reduction mill, and $6.85 per ton from 

 Chicago to the Ohio Valley destination. Transport charges on coal tar pitch are 

 assumed to be $1.10 per hundredweight on movements from St. Paul to the 

 Northwest plant as compared with 40^ per hundredweight on movements from 

 Ironton to the Ohio Valley location. 



"See Railway Tariffs, P.S.C. F.T. IS, T.C. 2-R, and P.S.C. 1-S. 



" Cross-country rates for shipments of 80,000 pounds minimum car-load lots 

 have been $27.96 per ton in recent years. Railway Tariff, T.C. 2-R. 



