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though if theNavy Department ever extends its commercial business between fixed points wholly under United States jurisdiction, there could be no objection to the control of rates by the Interstate Commerce Commission, the wording of the act by which commercial business is now performed by the Navy Department placing the control of rates upon Congress.
If there are to be public hearings on this proposed act, the writer would welcome an opportunity to further explain the workings of the commercial business performed by the Navy Department, how rates have been determined and applied, etc., and furnish any further information the committee might desire.
W. H. G. BULLARD The CHAIRMAN. We will now be glad to hear Mr. MacLean.
STATEMENT OF MR. CHARLES F. MacLEAN, 55 LIBERTY STREET,
NEW YORK, N. Y.
Mr. MacLEAN. Mr. Chairman and gentlemen of the committee, the Board of Trade and Transportation of New York, for which Í speak, is second to none in importance in the interest of inland waterway transportation if one may judge from its accomplishments and achievements.
The board of trade has changed largely through its accomplished secretary, Mr. Gardener, what was known formerly as the Erie Canal into the great system now called the Barge Canal, not only connecting the Great Lakes with tidewater at the Hudson River, but also Lake Ontario, the Finger Lakes of the State of New York and Lake Champlain, making them serviceable for water transportation between the whole country riparian to the Great Lakes and the New England seaboard, especially by way of the new Cape Cod Canal to Boston.
This advantages not only the State of New York, but the interests of all the States to which reference is made by lessening the cost of transportation for the farmer, the producer of ores, and also the manufacturer and furthermore diminishing the cost of living and enhancing the wages of labor.
It seems to us that the distinguished sponsor for the bill under your consideration in raising the term common carrier to a generic term has not fully recognized the difference between transportation under a franchise and the ordinary transportation by canals and other waterways.
Persons, individual or corporate, who exploit franchises and operate under franchises take the business that comes to them. Canal boatmen, individual or corporate, largely get their work by making business. They solicit business, at least in our State they solicit business to different parts of the State along our canals, and they so subserve the great manufacturing interests between Albany and Buffalo and on the Finger Lakes and on Lake Ontario and Lake Champlain. The boatman is largely, so to say, an opportunist; he comes on the water at certain seasons of the year and his great opportunity for business, subserving the interests which he serves, must often be decided upon almost immediately. If he has a schedule of prices for any service which can not be changed except upon a notice of 30 days or oftentimes upon 10 days, even a day, the wouldbe_shipper would lose his opportunity and the carrier his also.
It would be commonplace to speak of the Erie Canal as having created the city of New York and made the port of New York what
it is. Had the States of Maryland and Virginia heeded the advice of George Washington, they might have had communication with the Lakes and the seaboard, but they did not avail themselves of the opportunity of securing means of communication at cheap rates between the Great Lakes, the interior of their States and the southern seaboard by means of waterways.
We have spent an enormous amount of money upon the State canals that would amount, if it were deposited and compounded after the manner of the savings banks, to something over $500,000,000, and by the time that the
bonds which the State of New York has given mature the State of New York will have invested in the canals over a round billion dollars.
The people of the State of New York, both officially and as merchants and as members of the population, desire, of course, to do everything which will benefit the State and bring it prosperity and also to bring prosperity, so far as possible, to the States which its canals subserve, for the prosperity of other States must redound to the prosperity of the State of New York.
The State of New York contributed in the past year (calculated upon the returns of former years, since the report of Federal revenues and disbursements for the fiscal year ended June 30, 1919, is not yet accessible) about 40 per cent of the entire public revenue of the United States, amounting to $5,500,000,000. The 14 other States to which the inland waterways of the State of New York contribute provided 35 more percentage of the entire revenues of the United States. That is, 15 States of which New York is one contributed 75 per cent of all the revenues of the United States, and without that revenue the 33 other States which on the average contributed less than eight-tenths of 1 per cent to the public revenues would, for the most part, have no Federal improvements, buildings, waterways, or anything of that sort.
I thank you, gentlemen.
Mr. MERRITT. You spoke about the cheaper transportation of the present barge canal. "How much tonnage is actually using that canal now?
Mr. MACLEAN. I can not state exactly the amount of tonnage that it has, but the amount of tonnage is very low for its capacity. That is very largely due to Federal supervision. Last year almost exactly a year ago, we appeared before the Secretary of the Treasury and asked for certain modifications of the rules so that our people might put boats upon the canals. With a patriotic intent the legislature and the governor of the State placed the canals of the State at the disposition of the Federal Government that there might be made therefrom the greatest possible use in the transportation of munitions of war and other material for the Government. The Secretary of the Treasury said that he could not approve of boats built by the Government taking rates so low as to reduce the revenue of the railroads, and then, again, when he was asked whether he would be willing to make an arrangement by which freight could be shipped to the interior points in the West or from such points to the east on through shipments and through bill of lading and get the advantage of the lower canal rates for the water portion of the carriage, Mr. McAdoo said that he lid not think the administration could do that, because it would interfere with the rail rates. The business of the Federal Government that arose prevented putting on new boats on the canal for individual enterprise and also prevented the creation of carrier lines, because under the circumstances and the placing of the water rates on nearly a parity with the rail rates made it impossible to do business upon the canal. We are very anxious to be out from under the supervision and intervention of the Federal Government in that behalf.
Mr. MERRITT. Is it your view that if the business by barges on the barge canal is not under Federal control that private interests will construct barges and that the tonnage will largely increase?
Mr. MacLEAN. We were assured of that by the late superintendent of public works who said that he had many requests, almost daily, from private individuals who were going into that business, but that under Federal supervision they had all stopped.
Mr. MERRITT. When you said that this canal had made cheap freight transportation for the port of New York, that was rather potential than actual?
Mr. MacLean. Formerly it did, but since the barge canal was opened, in May of last year, the oppression of the Government has been there. The Erie Canal determined very largely the railway rates because of its competition, and it was the cheaper rate of transportation provided by the Erie Canal that, both directly and indirectly, so much advantage to the city of New York.
The CHAIRMAN. Do you understand from this bill, H. R. 4378, that the Interstate Commerce Commission would regulate the portto-port rates along the Erie Canal within the State of New York ?
Mr. MacLean. I do not. I just answered that question. I might go further, but it is obvious that if it is to be a through rate either to the Great Lakes or to Canada that by pro-rating it they might interfere, but so far as the transportation is confined to the State, that is specified in the bill. The CHAIRMAN. We are much obliged to you, Mr. MacLean. Mr. MacLEAN. I thank you.
NEW YORK BOARD OF TRADE AND TRANSPORTATION,
NEW YORK, October 3, 1919. Hon. John J. Esch, Chairman Committee on Interstate and Foreign Commerce, House of Representatires,
Washington, D. O. DEAR Mr. CHAIRMAN: Conforming to request you made at recent hearing before your committee we inclose herewith draft of suggested amendments to H. R. 4378.
These amendments are submitted as expressing the views of the waterwarand commercial interests in this State represented so largely by the New York State barge canal conference, a State-wide organization, and the York Board of Trade and Transportation, a New York City organization.
We have also had the benefit of the views and criticisms of Hon. Georg.
CHARLES F. MACLEAX,
FRANK S. GARDNER,
Trade and Transportation,
The amendments suggested to H. R. 4378 are as follows:
That lines 6 to 10, inclusive, on page 1 of the bill be amended to read as follows:
" SECTION 1. That the provisions of the act shall apply to all common carriers engaged in
“(a) The transportation of passengers or property by railroad, or part way by railroad and part way by water, but in the case of transportation of property, only when it is carried upon a through bill of lading including both the 'rail and water transportation and when the rate for the rail part of the haul sball not be greater than the rail carrier receives for the same rail haul when performed as a part of the all-rail haul between the same point of origin and same destination.”
That section 7 of the bill be amended by inserting after the word “act” in line 9, page 15, the words “except carriers by water excluded by subdivision (a) of section one of this act.”
(NOTE.—That is to say, as such subdivision (a) is modified by the amendment proposed above.)
That section 10 of the bill be stricken out, amending paragraphs (b) and (c) of section 6 of the act.
That the eleventh paragraph of section 20 of the commerce act be amended by adding at the end thereof the following: “ Provided further, That the two years' time allowed by this section for the institution of suits to recover the loss, damage, or injury complained of shall begin at and be computed from the date of the proper service of a notice in writing by the carrier upon the claimant that his claim will not be allowed by the carrier, and no contract, receipt, bill of lading, rule, regulation, or other thing of any character what. soever shall limit the right of a claimant to bring a suit as herein provided or exempt the carrier from the liability imposed by this section."
The CHAIRMAN. We will now hear Mr. Hill, of New York.
STATEMENT OF MR. HENRY W. HILL, REPRESENTING THE BUF
FALO CHAMBER OF COMMERCE, BUFFALO, N. Y.
Mr. Hill. Mr. Chairman and gentlemen of the committee, the Buffalo Chamber of Commerce, which I have the honor to represent at this hearing on the Esch-Pomerene bill, designed to amend this act to regulate commerce, has authorized me to call attention to certain sections and paragraphs of the pending bill, which you may conclude to be amended. The Esch-Pomerene bill has many very commendable provisions in it and they may stand without in any wise being affected by amendments to other provisions of the bill.
Existing provisions of the act to regulate commerce, approved on February 4, 1887, have been called the second Declaration of Independence, as they greatly relieved the commerce of the country from unjust and ruinous discrimination. To do that, however, it required e their rigid enforcement and frequent amendment to meet conditions unforeseen by the framers of such act, including the late Senator Worge F. Edmunds, of Vermont, and the late Senator John Shergruan, of Ohio, and others
. In the administration of the law it was pound that some of its original provisions might be extended and imeesroved, and the country itself found that it might be extended and in some respects perfected. Accordingly the present act to regulate commerce has a much wider scope than the act originally had. It
in popular favor and is a bulwark of defense to producers, shippers, and consumers, all of whom are dependent for the transportation of products, edibles, and supplies on rates of transportation and their regulation.
Neither the original act nor any amendments thereof, however, ever extended to water carriers, except possibly in a very limited manner, where such water transportation was an indissoluable part through transportation, connecting to railroad lines or affording connections at terminals, as is done in and about the harbor of New York, where floats a transport loaded with cars from the railroad yards in New Jersey to the warehouses in and about the port of New . York or across to the Long Island Railroad. This latter water carriage may be deemed to be a part of the railroad carriage and within the jurisdiction of the Interstate Commerce Commission. It also illustrates what may occur in other sections of the country where the necessity therefor exists. Aside from these few exceptions, the Interstate Commerce Commission has not been given jurisdiction over water carriers. The pending legislation, however, is designed to extend the law to include water carriers, except where such carriers operate wholly within a State, carrying only intrastate tonnage. It will be necessary to examine the pending legislation with some care to grasp the scope of its provisions.
Section 1 of the Esch-Pomerene bill, if that bill be enacted into law, will extend the scope of the act to regulate commerce, popularly known as the interstate-commerce law, to transportation of passengers or property by railroad or by water, or partly by railroad, or partly by water, applying to common carriers for hire, engaged in operating vessels on the lakes, rivers, canals, and other inland waterways within or bordering on the United States or the Territory of Alaska, the Panama Canal, and all waters within or without the three-mile limit from the coast of the United States or the Territory of Alaska traversed by vessels permitted to engage in the coastwise trade of the United States, provided they be engaged in interstate commerce. This is a departure from the original conception of the purpose of the act to regulate commerce. It was not intended to reach and include water carriers and not until power was conferred upon the President to include canals and interior waters within the scope of the transportation facilities, upon which he was authorized to expend moneys from the $500,000,000 revolving fund, has any department of the Government of the United States exercised any authority or undertaken to operate vessels over the canals and interior waterways of the State of New York, or any other State, as far as I am advised.
Federal operation over such waterways within the last two years has not been extensive and not altogether satisfactory to the commercial interests of the State of New York. The tonnage on the New York canals for the year 1918 was only 1,159,270 tons and for the year 1917 the tonnage was 1,297,225 tons. The tonnage for these two years was the smallest for any two years during the last half century. This decline, however, was not entirely due to Federal utilization and operation of the New York canals, but was undoubtedly in part due to other physical conditions obtaining with reference to the canals themselves while undergoing improvement and to the lack of adequate facilities for transportation over them. The general consensus of opinion, however, seems to be opposed to the continuation of Federal operation on the ground that such operation necessarily comes into close competition with individual and cor