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Mr. MERRITT. I think some gentleman who spoke to us to-day suggested that the way to meet that would be to assume that a rate established on a river or an inland transportation was fair and reasonable, and the only regulation would be to say that the railroads could not quote a rate lower than that.

Mr. Edmonds. That might be possible, but I do not think you will ever build up your waterways in this country—and I have nou lived so very long, but I have seen two or three of them stified in my lifetime by the railroads—I do not think you will build them up if you have any regulation.

Mr. MERRITT. Do you think you will have to regulate the railroads to save the waterways?

Mr. EDMONDS. What was that expression that the gentleman used to-day about rates? They would go down to some point below which they could not go any further. The railroads can go down to a point where they can not go any further.

Mr. MERRITT. The out of pocket rate? Mr. EDMONDS. Yes, sir; the out of pocket rate, or something or other. So, if you want to leave the railroads go that way, all right, but they will come to a point where they can not go any further.

But I do not want to take up your time. This matter has been talked of by a number of speakers. Mr. Cunningham made an excellent address here today. I think that is about as good an address as I have heard for some time; also the Secretary of the Inland Waterways Association; and both of those addresses pleased me a great deal and about met the views that I have with regard to the shipping business.

It may be possible that you may find it wise to regulate the inland waterways so far as canals are concerned, but I think you would make a great mistake if you attempted to regulate the Great Lakes or the coastwise traffic. Just let the supervision that we have in the Shipping Board alone and it will take care of itself.

You must understand that the Shipping Board came into existence just about the time the war was coming on. They had very little chance to carry out many of these provisions, because the whole world was upset and the shipping business was upset. They are very rapidly approaching the time where they are getting together all of this data, all of these reports, all of these different agreements which exist and which Mr. Alexander told you were in some cases fair agreements and should be allowed to exist. I think that supervision by the Shipping Board will be all that you will want to give the sick baby. Give it an opportunity to come to itself. Then, after that, there may be things occur that you may want to regulate. I thank you, Mr. Chairman. (Letter submitted by Mr. Edmonds for the Merchant Marine Committee.)



New York, August 6, 1919. Hon. WILLIAM S. GREENE, M. C., Chairman Committee on Merchant Marine & Fisheries,

Washington, D. C. MY DEAR MR. GREENE: My attention has been called to bill H. R. 4378 otherwise known as the “ Esch-Pomerene" bill. Speaking for myself personally. and also as representing the National Board of Steam Navagation, I am very much opposed to the provisions which attempt to extend the act to regulate commerce so as to apply to common carriers on inland waterways.

From an experience with the railroads and Interstate Commission dating back over a period of 20 years, I can only say that it would be extremely un, fortunate to place this power in the hands of any regulating body with leanings toward the railroad point of view. In the case of our New York Barge Canal during the past year the danger was clearly shown, and resulted in very considerable loss to the public and a decrease in the use of the canal through the efforts to place rates via the canal on a par with rates by rail. In other words, no railroad man or commission handling railroad matters will understand the special conditions applying to water-borne traffic and can not consistently exercise rate-making powers for such water-borne traffic in competition with rail rates. If the public is to obtain the maximum benefit from the use of our inland waterways these waterways should be absolutely free of governmental or other control that will hamper the free competition in service and rates. Very respectfully, yours,






The CHAIRMAN. Mr. Bland, do you want to say something?

Mr. BLAND. Mr. Chairman and gentlemen of the committee, I had not expected to participate in the discussion before the committee today, and only desire to supplement some of the remarks which I have heard. I.shall only take a few moments of your time.

The purposes of this bill, as I understand it, are to be highly commended, and the remedies it proposes are vitally important and necessary. With some of its provisions relating to regulations of rates charged on inland waterways by common carriers I am not in entire accord. As I understand it, under section 1, the provisions of the act apply to all common carriers engaged in the transportation of passengers or property by rail or by water or partly by rail and partly by water, and further provides that the term “common carrier" used in the act shall apply to pipe-line companies, telegraph, telephone, and cable companies operating by wire or wireless, express companies, sleeping-car companies, and all persons, natural or artificial, engaged in public transportation as aforesaid as common carrjers for hire. I further understand that under the terms of the bill privately owned companies operating on either interstate traffic or intrastate traffic would not be controlled by the bill—that is, operating as private carriers. Is that correct?

The CHAIRMAN. They would be private carriers and would not be common carriers in the ordinary meaning of that term.

Mr. Bland. But if a company is organized and carrying indiscriminately, so far as the public is concerned, for hire it would be a common carrier, and therefore come within the provisions of the bill, would it not?

The CHAIRMAN. Yes. A common carrier has a well-defined meaning in the law.

Mr. Bland. Then, it seems to me, as the gentleman just preceding has said, and I think some others, if I am correctly informed, as I was not present during the entire hearing, that the inland waterways, so far as rate regulation is concerned, should be left just as free as possible. The remedy to develope the use of the inland waterways of this country and to encourage the use of the proper equipment thereon—that is, towboats and barges and the establishment of modern terminals—is not, in my judgment, to be secured by the regulation or control of the rates to be charged by water carriers, but rather is to be encouraged and obtained by improving and making navigable the channels of our waterways. Let me give an illustration as to the lack of necessity of fixing or determining the water rates.

We organized, by public subscription, in Kansas City, the Kansas City Missouri River Navigation Co., and secured a subscription of a million and a quarter dollars for the purpose of building boats and barges of modern type and construction, and establishing modern terminals, on the reach of the river running from Kansas City to St. Louis. By action of the board of directors, and it was an arbitrary action, if you please, because we could have fixed any rate, we established a rate with a 20 per cent differential, as against the all-rail rate, such differential applying to all classes, that is first, second, third, and fourth class rail rates. During our operation we were offered large shipments of export flour, providing we could secure a joint river and rail rate, with through bill of lading, thus enabling us to deliver to some seaport for exportation. The railroad companies refused to enter into arrangements with us to establish the rate, and we were compelled to go before the Interstate Commerce Commission with application that the order be issued to put the joint proportional rates into effect. Eventually the order was issued, and with the result that we secured shipments of export flour, and were enabled to load our barges to capacity, and carried it down the river, delivering it to tbe railroad company at East St. Louis, which in turn carried the flour to seaport, in that case Newport News. What I seek to illustrate is this: That in order to secure the joint rate it was not necessary that the Interstate Commerce Commission exercise control over the rates which we had fixed upon the river, but the commission did take the river rate established by us, together with the rail rate, and provided a through rate with proportional distribution thereof.

As I just understood the chairman, he indicated that before there could be coordination and cooperation between rail and river lines there must be joint control. If this be correct, I do not quite agree with that view. If the river carriers are left to fix and determine their rates, the very existence of water-borne traffic will depend upon favorable rates to the public being offered by such carriers, and these common carriers operating upon the inland waterways of the country will be compelled to afford favorable rates, in order to attract commerce to the rivers. I think this statement is axiomatic. The self-interest and protection of the carriers upon the inland waterways will necessarily compel favorable rates. And if the benefit of those favorable rates through the medium of joint rail and river rates, with through bill of lading, is extended to inland cities within such distances as may be practicable, and to be determined by the Interstate Commerce Commission under the terms of this bill, then all such inland cities will receive an equal benefit by the use of the differential river rates. Just as illustrated by Mr. Thompson, secretary of the National Rivers and Harbors Congress, when he spoke of the fact that under the United States Railroad Administration joint rail and river rates have been extended into a vast territory where they have never applied before, and with the result that inland cities of the States included, took advantage of them. To illustrate, in operating the boats on the Lower Mississippi, under the United States Railroad Administration, many thousands of bags of sugar, of course, with other commodities, were carried up the Mississippi. I have not the entire data with me now, but I recall one shipment of 79,400 bags, of which 80 per cent went to 14 inland cities, and only 20 per cent, or 16,000 bags to the city of St. Louis.

So I say this, if the inland waterways are left independent—that is, free from interference by the Interstate Commerce Commission or by the Shipping Board, or by any other controlling governmental agency, so far as the determination of the rates to be charged is concerned-it will be beneficial to and encourage the operation of boat and barge lines upon the waterways, but if there is given power to the Interstate Commerce Commission to fix and determine the rates to be charged on port-to-port shipments, or to be charged where a joint rail-and-river rate applies, it will be prejudicial. "If, however, there is given the power to the Interstate Commerce Commission to compel joint rail-and-river rates, based upon the rates then applying, and if the commission is given the power to compel physical connection at docks and proportion the cost of the construction thereof, the result will be that there will be called to the support of river-way development not only the cities located upon the waterways but inland cities adjacent to the rivers, or removed, if you please, to a very considerable distance, say of 100, 150, or 250 miles, from the river, or, perhaps, in some instances greater distances. By such a method the development and use of the waterways, in conjunction with railways, would be a matter of common interest to all, not only to cities located upon the rivers but cities located inland, and I believe, with the other splendid provisions contained in this act, the Esch bill, and if the Government discharges its obligation and duty as I conceive it to be, and improves the inland water channels so that boats and barges can be placed upon them and operated economically and safely, then the practical and beneficial use of such waterways will be reestablished and inestimable benefit be conferred.

Our transportation facilities are wholly inadequate now, and should be added to or increased by the use of our great inland waterways, which have been so long and so sadly neglected. I hop therefore, that no provisions will be included in the bill which will place in any controlling body the power to fix and determine the rates to be charged by carriers upon the inland waterways. I will not consume now further time of the committee.

I thank you.


OF THE SHIPPING BOARD. The CHAIRMAN. Mr. Dean has come in since I spoke, and he wants to make a few remorks.

Mr. Dean. I am Mr. R. A. Dean, and I am assistant general counsel of the Shipping Board.

The position of the Shipping Board has been covered by the statement made by Mr. Edmonds and Judge Alexander.

The Shipping Board at this time asks to be left alone in dealing with the regulatory features of the bill, because they feel that if

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you interfere and take away their present power—the power, by the way, which has been exercised to a very limited extent that you may interfere with their plans or their policy in regard_to our merchant marine, in which we are all so much interested. For this reason they oppose the provisions of this bill which provide that the regulation of traffic by water shall be turned over to the Interstate Commerce Commission. I simply wish to put them on record to that effect.

They have considered the matter in connection with the investigation which Mr. Edmonds and Judge Alexander and the Committee on Merchant Marine and Fisheries made a month ago, with the idea of getting together data which would show the committee what should be done in the nature of legislation to help us work out our problem. And this very matter came to the attention of the Merchant Marine and Fisheries Committee at that time, in connection with other problems. The committee came to the conclusion that it was a great mistake to have this regulatory function taken away from the Shipping Board at this time.

The CHAIRMAN. Of course you have no jurisdiction over inland water transporation now?

Mr. DEAN. No.
The CHAIRMAN. Have you any views on that feature?
Mr. DEAN. No. I do not think the board considered it at all.

The CHAIRMAN. Very well. The committee is very much obliged to all the witnesses who have appeared to-day for the informative character of the testimony they have presented. We will not have a meeting of the committee to-morrow, as it is a legal holiday—the parade of the First Division. Recess until 10 o'clock Thursday morning

(Whereupon, at 5.25 o'clock p. m., an adjournment was taken until Thursday, September 18, 1919, at 10 o'clock a. m.)



Thursday, September 18, 1919. The committee met at 10 o'clock a. m., Hon. John J. Esch (chairman) presiding.

The CHAIRMAN. There is present this morning Mr. Tomlinson, of the Division of Inland Waterways of the United States Railroad Administration, and we will be glad to hear him at this time.



The CHAIRMAN. Please state your name, address, and your official capacity, for the benefit of the committee.

Mr. TOMLINSON. G. A. Tomlinson, director of Inland Waterways, United States Railroad Administration, Washington, D. C.

The CHAIRMAN. You may proceed, Mr. Tomlinson.

Mr. TOMLINSON. Mr. Chairman, the Inland Waterways Division of the United States Railroad Administration is the ultimate out

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