Senator WALSH. Does that appeal to you as a possibility? are. Senator WALSH. Yes. Dr. HUEBNER. I do not know what the intentions of that railroad Senator WALSH. You can not think, can you, of any railroad that would want to extend its line so as to reach over to the other seaboard? Dr. HUEBNER. No, sir; I can not. Senator WALSH. Let us get back then. Let us see what would be left. I can not conceive that any of these railroad-owned lines are going to run through the canal-run their boats through the canal without becoming subject to the other provision of the act which prohibits railroad-owned ships engaged in competition. Dr. HUEBNER. Unless they sell their steamers and the steamers then fall into the hands of some one who wishes to operate through the canal. Senator WALSH. Let us see what percentage of the railroad-owned ships would go in there. I am going to assume that they are going to be compelled to observe the law now. Dr. HUEBNER. I will have to make an addition to ascertain the percentage. Senator WALSH. I think you said 64 per cent. Senator BRANDEGEE. Do you mean how many ships that are now owned by the railroads of the country are going to be divested from railroad ownership by the provision of this act? Senator WALSH. No; I have not asked that. I want to first find out what percentage of our ships would be excluded from going through the canal by reason of the fact that they are railroad-owned. In other words, I am going to try to find out if I can about how many vessels will be going through the canal before the Senator BRANDEGEE. I know; but the act prevents them from being railroad owned, not only from going through the canal. Senator WALSH. If they are railroad owned they do not go through. Senator BRANDEGEE. The railroad can not own them. There is the section of the act, section 11. If they compete or may compete, it prohibits the railroad from owning them. Dr. HUEBNER. As regards the Atlantic coast, 67 per cent of the line tonnage is owned or controlled by railroads. Senator WALSH. Let me put it in another way, then, without following that. About what number of vessels, and what amount of tonnage, do you figure will go through the canal of vessels engaged in the coastwise trade? Dr. HUEBNER. I have never made a study of that. Senator WALSH. You have no idea about it? Dr. HUEBNER. I think Prof. Johnson, who I understand is to appear before this committee, might furnish that information. Senator WALSH. Some of these vessels that engage in the coastwise trade are likewise engaged in foreign trade; that is, they stop at foreign ports? Dr. HUEBNER. A few lines do. Senator WALSH. Others are engaged exclusively in coastwise trade? Dr. HUEBNER. Yes, sir. Senator WALSH. And still others are engaged entirely in foreign trade? Dr. HUEBNER. Yes, sir. Senator WALSH. Have you given any consideration to the question as to whether the vessels engaged promiscuously in the foreign and the coastwise trade fall within the class permitted to go through the canal without the payment of tolls? Dr. HUEBNER. You mean that they will be prohibited from going through the canal because they belong to a conference? Senator WALSH. No; I had gotten through with that. Dr. HUEBNER. I do not believe I comprehend your question. Senator WALSH. We were told this morning that some of the American vessels are engaged in foreign trade exclusively, some others are engaged in the coastwise trade exclusively; some others are engaged under an enrollment in the registry, or something equivalent thereto, in both the foreign and coastwise trade; that is, they stop en route at foreign ports. Have you given any thought to whether vessels thus engaged will be permitted to go through the canal free? For instance, a vessel stops en route at Habana and Jamaica and goes through the canal and goes up to San Diego, San Francisco, or Seattle? Dr. HUEBNER. No; I have not given that matter any thought. Senator WALSH. Another thing: We were told here this morning that one of the American lines stops at Hawaii to take on mail or passengers, but not to take on freight. Are you familiar with that condition of things? Dr. HUEBNER. The Oceanic Line operates from San Francisco to Hawaii and extends one of its services to Australasia; the Pacific Mail Line operates to Hawaii, and one of its services extends to the Orient. Senator WALSH. The Pacific Mail Line takes freight from Hawaii? Dr. HUEBNER. Yes, sir; but the Matson Navigation Co. is the important line between San Francisco and Hawaii. Senator WALSH. Why does not the Pacific Line carry freight to and from Hawaii? Dr. HUEBNER. It carries some. Senator WALSH. It carries some? That indicates that it does not carry as much as it might? Dr. HUEBNER. No, sir; the Matson Navigation Co. is the predominant carrier in that trade. Senator WALSH. Why does not the other line carry freight? Dr. HUEBNER. I wish I knew that; as to whether there is an understanding between the two I can not tell. Senator WALSH. Is there any defect in the law that embarrasses it in stopping at Hawaii to take on freight? Dr. HUEBNER. I imagine the Pacific Mail Line caters particularly to the oriental trade in which the Matson Navigation Co. is not interested. The Pacific Mail Steamship Co. in operating to the Panama Zone also stops at various Mexican and Central American ports; likewise on the Atlantic coast the Red D Line, for instance, operating between New York and Porto Rico, also extends its service to Venezuela. There are thus several lines which are engaged partly in the coastwise trade and partly in the foreign trade of the United States. Senator WALSH. What would you say of the likelihood of this being done from a commercial standpoint: Cargoes being brought from European ports to New York, there loaded upon American ships and passing through the canal free of tolls to ports on the Pacific in competition with freight going direct from European ports through the canal paying the tolls to the Pacific coast? Dr. HUBENER. Yes; I feel that is possible and I should think that would be one source of complaint on the part of foreign carriers as constituting a discrimination. Senator WALSH. That is what I wanted to know, sir. Have you figured on what the additional expense of pursuing that indirect route-the cost of transshipment-would be as compared with the amount of tolls that the ship pursuing the direct route would be called upon to pay? Dr. HUEBNER. No, sir; I have not given the matter any attention, but I am inclined to think there would be a good deal of that done, especially in the oriental trade, where the cargo will first be consigned from New York to San Francisco, reloaded, and then sent to the Orient. Senator WALSH. Have you any figures on that? Dr. HUEBNER. No, sir; I have not; but I doubt whether the cost of transferring a ton of freight would be as high as $1.20. Senator WALSH. Could you tell us how far she would have to travel, the freight would have to travel beyond the direct route? Dr. HUEBNER. I have been told that that course would be the regular line of traffic to the Orient. Senator BRISTOW. How far would it have to divert out of the regular line to get into San Francisco? Dr. HUEBNER. I doubt whether it would Senator BRISTOW. Do you not know as a matter of fact that it would have to divert between 400 and 500 miles? Dr. HUEBNER. No, I do not. I am not familiar with that. Dr. HUEBNER. No, sir. The CHAIRMAN. I think that is all, Doctor. STATEMENT OF MR. WALTER WOOD, PHILADELPHIA, PA. The CHAIRMAN. State your full name, business, and line. Mr. WOOD. My name is Walter Wood, I am here as representative of the Philadelphia Chamber of Commerce, of which I am the chairman of the committee on legislation, and I am intrusted with resolutions from the last board of directors. The CHAIRMAN. What is your business? Mr. WOOD. My business is iron, cast-iron pipe manufacturer, water and gas, for sundry municipal requirements. The CHAIRMAN. I believe you appeared before Senator Simmons's committee when it was handling the tariff matter some months since? Mr. WOOD. I should not be at all surprised. Busy men have many angles, sir. The resolutions which the chamber of commerce has intrusted me with I shall read, if it is your pleasure, and as I proceed I must ask the members of the committee to be ready to accept a rather broad and new view of the treaty than has been the case in the past. The CHAIRMAN. Let me ask, are you going to discuss the legal aspects of the treaty? Mr. WOOD. No, sir. I think what I shall say will occupy less than 10 minutes, and I think perhaps it would be better to have the matter in a connected statement rather than interjectional. The CHAIRMAN. The Chair will say in passing that the committee is not anxious to receive any expert advice in regard to the instruments. Each member of the committee is making his own constructions on the paper. Mr. WOOD. I am utterly unable, sir, to discuss the legal effect of the situation. The resolutions are as follows: RESOLUTIONS OF THE CHAMBER OF COMMERCE OF PHILADELPHIA. Whereas the Philadelphia Chamber of Commerce has placed itself on record as favoring free tolls on vessels plying solely between coast-to-coast ports on the United States; and Whereas the question has arisen as to whether the Hay-Pauncefote treaty has not been violated by this provision in the Panama Canal tolls act: Be it therefore Resolved, That the Philadelphia Chamber of Commerce regards the solution of the Panama Canal tolls a question of honor, and calls upon the Congress of the United States to take no action that may be construed as an infringement of national honor, but give the vessels of all nations the same advantages that are accorded Amerian vessels under similar conditions and charges. Section 11 of Article III reads, with the extra words left out: The CHAIRMAN. Are you a lawyer? Mr. WOOD. No, sir. The CHAIRMAN. I only want to suggest to you that I do not think any member of this committee is inviting the view of any person, layman or lawyer, as to the construction of that instrument. The members will do that for themselves. If the chamber of commerce has declared itself on that subject, we will take their declaration. Mr. WOOD. Pardon me, I am not undertaking any legal argument. I want you to understand the business view and the way which we arrived at that business view. It will not take a minute, sir. The CHAIRMAN. Very well. Mr. WOOD. That clause is a very short one: The canal shall be opened to vessels of commerce of all nations on terms of absolute equality, so that there shall be no discrimination in respect of the conditions or charges of traffic or otherwise. The chamber has approached the reading of that from the broadest standpoint and with the ultimate thought, as you can readily appreciate for man who comes from the Delaware River, the maintenance and growth of our merchant marine. It has occurred to us that in bringing up the bill which is now before you, that the desire has been to act honestly and squarely, but without overlooking the best way in which to act honestly and squarely and for the best interests of the country. The desire of the American people as to the Panama Canal we apprehend is, first, the cheapening of freights between the east and the west coasts. Second, to prevent shipping combinations controlling that waterway. The repeal of free tolls secures for our country the reputation of desiring to act honestly, but it still permits the destroying of trade between the east and the west coasts by high freight charges. It was a pity, sir, it seems to the Chamber of Commerce of Philadelphia, that the English Government started any contention as to the regulations that were made by the United States. It would have been very much better if they would have accepted them and claimed that they should have the benefit of them in their entirety. It would have been well if instead of continuing that contention in our note we should have said to the foreign office in London: "In your note you have entirely misconstrued our contention. The canal is for the use of vessels of all nations upon equal conditions and charges. Come and use the same upon this basis.' If our country should have met them in this spirit we would have secured first, the reputation of broad and generous honesty; second, we would have secured the most effective means of cheapening the freight charges between the east and west coasts; third, the most effective method of controlling shipping combines through the canal; and, fourth, the retaining of a large part of the coast to coast business, which otherwise will be lost to foreign nations on account of the high freight in American bottoms. In order that foreign vessels shall bear charges similar and of equal amount to those imposed upon vessels built and operated under American laws in the coast-to-coast business, it will be necessary to handicap them (that is, the foreign vessels) by a fee equal to the extra cost of construction of the American vessels in American shipyards and the cost of operation under navigation laws. This is about 18 pence per ton. The rate of freight in American bottoms, coast to coast, is at present-I am speaking as if the Panama Canal were open-$7 to $8 a ton from England to San Francisco, or from New York to San Francisco in foreign bottoms the rate would be from $4 to $4.50. If there is any question of 2 shillings being a too moderate handicap, there can be no question that 3 shillings a ton will be more than enough to protect the construction and operation of American vessels under our navigation laws. It will give them about 60 to 100 per cent protection. There is no doubt that American shippers would be glad to save the 2 to 3 shillings difference in freight between the American and foreign bottoms and absorb this 3 shillings per ton, or that a foreign bottom in an American port would absorb the same rather than seek cargo in a Mexican, Canadian, or other foreign port. It is a self-evident fact that the difference in freight rate of $2 to $3 a ton will cause buyers in this country to make their purchases from foreign nations rather than to give them to merchants in the United States. This solution of the question will keep entire faith with all nations and permit the trade between the east and west coasts to continue instead of diverting it to foreign business. That, in substance, sir, is the condensation of our thoughts and resolutions which we passed. The CHAIRMAN. We are very much indebted to you, Mr. Wood, for presenting them. Is there anything else? Mr. WOOD. I should like to add this, Mr. Chairman, that I think it is evident to everyone that if an iron man on the Delaware River was competing in San Francisco for a cargo, it would be impossible for him to secure that contract on the Pacific coast as against a foreign bidder, because he would have to pay from $2 to $3 a ton more freight to carry his goods to San Francisco than the Englishman would carrying his goods from England to San Francisco. |