Mr. RING. Because I believe if the free tolls stand that that sav. ing will go into the hands of the shipowners and will be retained by them.

Senator BRISTOW. What makes you think that?

Mr. RING. Why, the natural laws of trade. They are not going to give away a benefit simply as public benefactors.

Senator BRISTOw. Yes; but if there is such a thing as competition, would they not take into consideration the cost of operation in fixing their rates?

Mr. RING. I do not quite follow you, Senator.

Senator BRISTOWw. Suppose that these ships are competing with the transcontinental railroads for business and they undertake to fix their scale of rates in order to get the business, do they not take into consideration the cost of operation in order to fix the scale?

Mr. RING. Undoubtedly they do, but they are in competition with the railroads now.

Senator BRISTOW. They are? What ones, please?

Mr. RING. I should take it that the American-Hawaiian Steamship Co.

Senator BRISTOW. Is in competition with the railroads? To a certain extent; yes. Does it not take into consideration the expense of operating in fixing its rates?

Mr. RING. All companies take that into consideration, Senator. Senator BRISTOW. You have said that the reason that the American merchant vessel can not compete with the foreign vessels is because the expense of operation is so much more that it can not compete in the same trade; that they have to pay higher wages. Now, there is no difference in an expense whether it is paid to a man as a salary or to the United States as a toll for operating a vessel, is there? It is an expense just the same, is it not?

Mr. RING. They are both expenses if they are both paid.

Senator BRISTOw. If higher wages are a handicap on the American merchant marine, so that they can not compete with the foreign ships, which pay lower wages, why would not $125,000 in tolls for operating a ship a year be a great handicap on that ship in competing with some other transportation agency-like a transcontinental railroad? Mr. RING. All those elements enter into the business proposition of whether it can be made profitable or not, but they have existed for years, and I do not believe they will be changed when the Panama Canal is opened.

Senator BRISTOW. "They have existed for years." I do not exactly understand. There are no tolls charged any coastwise vessels in our waterways, and there never has been, has there?

Mr. RING. Not tolls.

Senator BRISTOW. This is the first time tolls have ever been levied. Wherein have vessels been competing with the transcontinental railroads where tolls have been charged by the Government on those

vessels?

Mr. RING. I do not know that they have. There have been no tolls charged, but the steamships have to govern their rates by what they can get in competition with the railroads, and vice versa.

Senator BRISTOW. You speak of the American-Hawaiian Line being in competition with the transcontinental railroads. It is also in an alliance with a transcontinental railroad, is it not?

Mr. RING. That I do not know.

Senator BRISTOw. Do you not know that it has a traffic contract with the National Mexican Railroad, which runs across the Isthmus of Tehuantepec, which is operated by S. Pearson & Son (Ltd.), under a lease from the Mexican Government, and that the Mexican Railroad gets one-third of the rate on all traffic that is moved across its lines, and that is handled by this steamship company?

Mr. RING. I have been informed that they have such an arrangement with the Tehuantepec Railroad, but just what it is I do not know.

Senator BRISTOw. So that this American-Hawaiian Line which you refer to is in a traffic arrangement with that railroad. That is undisputed; that is admitted, I will say, if you have not that detailed information yourself. It has been admitted here, and has not been challenged. They are simply cooperating with and operating in connection with a transcontinental railroad.

Mr. RING. I presume that is correct, the same as the Panama Railroad Co. has been operating the same way.

Senator BRISTOW. Operating under the Government and in connection with the Pacific Mail Steamship Co., and the Pacific Mail Steamship Co. being owned by the Southern Pacific Railroad. It has been, as a matter of fact, as you suggest, for some 40 years controlling that traffic until this law which is now being attacked was drafted, and that was the first time it was proposed that the Panama Canal should be a free and open waterway for the commerce of the world, untrammeled or uncontrolled by transcontinental railroads, and that is attacked now, and you say your chamber of commerce is in favor of that attack. It wants the coastwise trade to be burdened with these additional tolls on this canal. Why should the Government, may I ask you, charge tolls for the use of the Panama Canal any more than the Soo Canal on the Great Lakes?

Mr. RING. I do not think that any distinction should be made between any tonnage passing through the Panama Canal.

Senator BRISTOW. Well, if there are tolls charged American vessels passing through the Panama Canal why should not the tolls be charged in the use of the Soo Canal?

Mr. RING. I do not know that I can answer that directly.

Senator BRISTOW. Why should any ships be permitted to enter New York Harbor, where the Government has expended something like, I think, $17,000,000 in perfecting it and preparing it for the commerce of New York and the country-why should ships be permitted to go into that harbor where we have spent so much money free of any port charges of any kind, and those charges be charged on vessels in the Panama Canal?

Mr. RING. What steamers do you refer to as being free from any charges?

Senator BRISTOWw. Coastwise vessels. To illustrate, a ship will start from Liverpool to New York. It is an English ship. An American ship will start from Liverpool to New York under an American flag. These two ships will enter New York Harbor on exactly the same terms and pay the same charges. But if a ship comes from Boston-it may be of the same size, the same character of a vessel-and it enters New York Harbor, it will sail in by the side of these

other two and be exempted from tolls. Why should there be that distinction?

Mr. RING. I can not answer that question. I do not know. Senator BRISTOw. You can not see any reason for any distinction there any more than you would for a distinction at Panama?

Mr. RING. I could not answer that question definitely without considering it more, Senator.

Senator BRISTOw. I think that is all for the present, Mr. Chairman, so far as I am concerned.

Senator SIMMONS. Ships engaged in the overseas trade, whether they sail under an American flag or a foreign flag, are now permitted to enter the port of New York and the other ports of the United States without paying tolls.

Mr. RING. Without paying tolls?

Senator SIMMONS. Without paying any tolls at all.

Mr. RING. There are no tolls collected.

Senator BRISTOW. That is what I say is the fact now?
Mr. RING. Yes.

Senator SIMMONS. If we had a treaty with Great Britain providing for absolute equality of treatment of vessels of all nations entering our ports, as we have with reference to vessels going through the Panama Canal, and we imposed a toll upon foreign vessels entering the port of New York or any other port of the United States, would you not then say that we ought to charge likewise a toll upon American vessels entering a port?

Mr. RING. I would say so. That would be living up to the treaty. Senator BRISTOW. We have no such treaty, and we do not charge any tolls upon foreign vessels, and neither upon our own vessels. But if we had such a treaty with reference to our ports as we have with reference to our canals you would say that we could not charge foreign vessels tolls and exempt our American vessels from tolls? Mr. RING. Most assuredly.

Senator BRISTOW. The Senator spoke of treaties

Senator SIMMONS. I am not through.

Senator BRISTOW. Oh, you are not through?

Senator SIMMONS. No. Senator Bristow asked you, Mr. Ring, with reference to the effect of the toll charge upon the cost of operating American coastwise vessels. I understood him to say that the tolls for a vessel of about 12,500 tons-I did not hear what the size of the vessel spoken of by the Senator was

Mr. RING. Five thousand tons, I think he said.
Senator SIMMONS. Five thousand tons.

$12,500 tolls, would it?

That would not make

Senator BRISTOW. If the Senator will pardon me, you did not understand my question, I think. I took a vessel with a net registry of 5,000 tons, and the return trip, making the round trip, it would pass through the canal twice, and the total tolls for that ship would be $12,500 for that trip.

Senator SIMMONS. That is, it would carry through the canal 10,000 tons on both trips?

Senator BRISTOW. That depends entirely on how it was loaded. Senator SIMMONS. It was in testimony here the other day, and I want to ask you if you know anything about that, that the class of vessels that would likely use, and probably could economically use

the canal, would be vessels of a net tonnage according to the measurement basis of between 3,000 and 5,000 tons, I think. Perhaps it was 3,000 and 4,000 tons. Have you any knowledge as to what class, or any views as to what size vessels could most economically be employed in that coastwise trade through the canal?

Mr. RING. I am not familiar with that. I know more of the class of the foreign tonnage than I do of the coastwise. It is generally supposed that a steamer will carry about two and a half times its net register in actual measurement and weight tonnage.

Senator SIMMONS. I think that is in conformity with the testimony of Prof. Johnson. So that if the vessel passing through the canal was 10,000 net tons register according to the weight measurementMr. RING. Five thousand.

Five thousand one

Senator BRISTOW. Five thousand, I mean. way and 5,000 the other way would make 10,000. That would be about 20,000 tons in weight, would it not?

Mr. RING. No; hardly in weight, but in weight and measurement. A steamer will not carry two and a half times its net register in actual weight.

Senator SIMMONS. I do not know whether you have any technical knowledge about that, but the testimony was that the average would be about two tons of weight for each net ton of measurement. Mr. RING. About two tons.

Senator SIMMONS. So that if it was 5,000 net registered tons according to the weight measurement, it would not be $1.25 a ton, but that would be equivalent to about 60 cents a ton per weight. Mr. RING. That is very nearly correct.

Senator SIMMONS. So that upon 5,000 tons of 2,000 pounds each instead of the sum that the Senator mentioned a little while ago, $5,000 one way, it would be about $3,000.

Senator BRISTOW. If the Senator will pardon me, the tolls are based on the net register of the vessel, and not on what it is carrying. What it is carrying has nothing to do with the tolls.

Senator SIMMONS. That is exactly what I have said.

Senator BRISTOW. How do you get that, then?

Senator SIMMONS. I have said it would be charged according to the net register, which means the measurement as ascertained upon the measurement basis.

Senator BRISTOW. And my illustration was

Senator SIMMONS. Let me finish. And the charge upon the net ton according to the measurement basis is fixed by law at $1.25, but a net ton by the measurement basis is 2 tons by the weight basis.

Mr. RING. Allow me to explain that the actual charge on the cargo

carried would not be $1.25 a ton.

Senator SIMMONS. Exactly.

Mr. RING. So it would be in the neighborhood of 60 cents a ton. Senator WALSH. A ton weight?

Senator SIMMONS. Yes; let me finish this question.

Senator BRISTOW. I do not want the Senator, and I know he does not wish to mislead himself, or the gentlemen in regard to what I said

Senator SIMMONS. My mind is very clear about your position and my position.

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Senator BRISTOw. I said the net registered ton is what the vessel pays. I am not discussing how much traffic it is carrying. I am discussing the charge upon a vessel of 5,000 net tons registered that passes through the canal. If that is the registry of the vessel, it will cost $1.20 instead of $1.25, and that would be $6,000. Is not that correct?

Senator SIMMONS. Six thousand net registered tons; but there would be 12,000 tons of stuff in there according to the weight measure

ment.

Senator BRISTOw. That would depend altogether upon how it was loaded and what it was loaded with.

Senator SIMMONS. The witness said it would average about two to one.

Senator WALSH. The amount it would pay would be the same thing

Senator SIMMONS. Just exactly the same. The amount of money that this 5,000 net registered tons would pay would be that sum multiplied by $1.20.

Mr. Ring, are you familiar with the act of 1891, by which this Government gave to all vessels of a certain class, of a certain speed, and a certain tonnage a subsidy or a bonus, or whatever you may term it, of $1 a mile for carrying the mails from American ports to South American ports, and from Pacific ports to oriental ports?

Mr. RING. I know of that law. I do not know that I am familiar with all the details of it, Senator. I know it very well, though.

Senator SIMMONS. A dollar a mile, we will say, from New York to some point on the western coast of South America would amount to about very nearly as much as the tolls from a vessel going from New York to San Francisco, would it not?

Mr. RING. Very nearly, around to the coast of Chile or Peru.

Senator SIMMONS. Can you tell me whether there is a single American vessel sailing from any Atlantic port to any South American port that is taking advantage of that offer on the part of the Government? Mr. RING. I do not know of any.

Senator SIMMONS. Do you know whether it is a fact or not that there is practically none taking advantage of that from Pacific ports to oriental ports?

Mr. RING. I do not know, unless possibly it is the line that has been revived from San Francisco to Australia. Whether they are getting that subsidy or not, I am not sure.

Senator SIMMONS. You say that would be just about the same bonus, if you call it a bonus, as the tolls would be, if you called that a bonus?

Mr. RING. Practically the same.

Senator SIMMONS. Although we have had that law upon the statute books making that offer since 1891, no vessel sailing from Atlantic ports has ever taken advantage of it, and while some few did on the Pacific coast, they have surrendered their contracts, and so far as you know there are none now taking advantage of that proposition on the part of the Government?

Mr. RING. That is as far as my knowledge and information of it goes, Senator.

Senator WALSH. I want to ask you a few questions. Mr. Choate, I suppose