Senator WALSH. They would be tramp ships? Mr. OUTERBRIDGE. Yes; they would have to be tramp ships. Senator WALSH. So whatever grain was carried from those ports to European ports would go on tramp ships? Mr. OUTERBRIDGE. Yes; undoubtedly. Senator WALSH. Among which you would expect this lively competition always to exist? Mr. OUTERBRIDGE. Yes; undoubtedly, but I do not think any of it would come to New York. New York lost its trade in all heavy produce; it has no grain trade; has no export flour business. Senator WALSH. You would not expect any flour from the Pacific coast to be landed at Atlantic ports? Mr. OUTERBRIDGE. Yes; I would expect it to be landed at Atlantic ports, but not at New York. The CHAIRMAN. At which ports? Mr. OUTERBRIDGE. Newport News, Baltimore, and all the ports that attract the tramp steamers. We no longer get them in New York. Senator WALSH. You would then expect flour and wheat from the Pacific coast ports brought into the Atlantic ports in the tramp steamers? Mr. OUTERBRIDGE. I should expect traffic of that sort would develop, undoubtedly. Senator BORAH. You spoke a few moments ago with reference to the effect of the transportation through the canal upon the railroad situation. I think we all got the general idea of what you had reference to, but I wish you to state briefly just what you think that effect would be in a succinct way; how would it operate; how would it affect the railroads, and to what extent? Mr. OUTERBRIDGE. That is purely a personal view. Senator BORAH. I think your personal view upon this matter is important to the committee. Mr. OUTERBRIDGE. My personal view is, there is going to be a vast amount of freight taken away from the railroads to go by the canal; freight where the speed of transportation is not so important, bulk freight. For instance, in one department of my own business, I keep about 50 cars, tank cars, employed running back and forth from the Pacific coast to the eastern coast as fast as they can go, almost. Now, a tank steamer would carry that product for us. It is not a question of time. As a matter of fact most of this product is sold on contract for delivery long ahead, months ahead, and the tank steamer would bring that product around at a very much lower rate than the transcontinental lines can possibly haul it, and I am quite sure that on heavy bulk freight of many kinds and classifications, which has heretofore gone by the transcontinental lines will go by the Panama Canal route, where the element of time in transportation is not so important. Senator SIMMONS. That will happen whether tolls are charged or not? Mr. OUTERBRIDGE. Unquestionably. Senator BORAH. What effect will the toll question have upon that particular proposition you are now speaking of? Mr. OUTERBRIDGE. I do not think it will have any effect on it. I think that toll question is going to disappear. If it appears any where, it will appear in the ultimate profit and loss account at the end of the year. Senator BORAH. If we should charge tolls, then you think the final general result would be about the same as if we do not? Mr. OUTERBRIDGE. Just about the same. Senator SIMMONS. So far as railroad rates are concerned? Mr. OUTERBRIDGE. So far as traffic is concerned to be done through the canal. Senator BORAH. You believe this waterway will build up a competitor against the railroads, thereby eventually keeping alive competition between these two systems of transportation? Mr. OUTERBRIDGE. So far as I have any business judgment at all I would stake it on that opinion. Senator BORAH. And that opinion of yours is arrived at by reason of your experience, and by reason of your conversation and discussion of this matter with business men? Mr. OUTERBRIDGE. Yes, sir. Senator BORAH. And railroad men? Mr. OUTERBRIDGE. Yes, sir. Senator BORAH. All you said to Senator O'Gorman, that in your opinion the railroads very generally shared your view in regard to this matter Mr. OUTERBRIDGE. Such of the railroad presidents as I have met and talked with about it, quite a number of them, expressed great concern as to what the ultimate effect of this will be. Senator BORAH. If that is true with reference to our transcontinental lines, what would you say with reference to the Canadian transcontinental lines and the Canadian Pacific, etc.? Mr. OUTERBRIDGE. I think that there will have to be a great competition with them, but it will not be manifest so soon. In the first place, the whole existence of the Dominion of Canada railroadsthe railroad policy--the Government itself is so deeply involved in it that there will be a tremendous endeavor to stem the economic trend for a time for the protection of their roads until they can develop their local traffic more by building up the communities along their lines. Senator BORAH. Will the Canadian Pacific and the transcontinental lines of Canada have any advantage over the American lines, do you think, in this matter? Mr. OUTERBRIDGE. I can not see where. Senator BORAH. I observed the other day an article in the London Times to the effect that they thought it would have considerable advantage over the American lines, and instanced one matter, that of our Interstate Commerce Commission not having jurisdiction over them, not hampering them in the question of their freights, etc.; that they would have an unquestionable advantage in dealing with this situation as against the American lines. Mr. OUTERBRIDGE. In the first place they are regulated and controlled in Canada now as to their rates; the Canadian Railway Commission has just rendered a decision reducing the schedule of rates on all their transcontinental business as well as on their local business. They are not operating, or will soon not be operating when these new roads are completed all the way through, with sufficient tonnage now to keep them alive. I saw the testimony taken before that railway commission, and some of the officers of the Canadian Northern Railroad made the statement that when the three transcontinental lines are completed the volume of traffic in sight now will leave a deficit of $29,000,000 a year to be divided between them, and they were putting up a petition that these two should not only not be decreased, but that they should be allowed to increase, and in the face of that this decision has just been rendered; and I am quite sure they are not going to be in a financial condition to make any undue competition to the Panama Canal route by lowering rates below the transcontinental rates of the railroads in this country. Senator BORAH. One thing more in regard to that. What do you think will be the effect of this divorcing statute with reference to the railroads not being permitted to own ships which go through the canal? Mr. OUTERBRIDGE. What do I think will be the effect of it? Senator BORAH. Yes. Is it a wise or an unwise thing to have, in your opinion? Mr. OUTERBRIDGE. I believe it is a wise thing, in my opinion; I think it will be a very hard thing for them to meet; but I believe that ultimately in the interests of the people it is a wise thing to prevent the control of competing water lines by the railroads. Senator BORAH. There is one thing more in regard to the treaty. You spoke in the beginning of a moral right to do this. I assume, of course, you arrive at that conclusion by reason of the fact that you believe the treaty prevented us from doing it? Mr. OUTERBRIDGE. I have a moral conviction that it would be a violation of the contract, such as I illustrated by commercial transactions. Senator BORAH. But if you should honestly arrive at the conclusion that you had the right, the moral question you speak of would disappear largely, would it not? Mr. OUTERBRIDGE. I have arrived at a moral conviction after a very careful study of the whole history of the negotiations, that it would be wrong; therefore I can not be changed by an argument. Senator BORAH. I am not assuming that you would be changed; but supposing you had arrived at a different conclusion, that we did have the legal right to do this, then there would be no moral reason why we should not do it? Mr. OUTERBRIDGE. I would not go quite so far as that, Senator. I am a little bit inclined myself to the point of view that respect to the opinions of other people is an obligation, and that if a very large preponderating number of the people of the world looked upon this matter, which is a public matter, as susceptible of only one interpretation, I should feel even if my own-I am not a lawyer, but if I were, if my legal mind suggested to me that it was proper, that I ought to yield decent respect to the opinions of the large majority of the other people. Senator BORAH. If we had the consensus of opinion crystallized, I think there might be something in that contention, but in view of the fact that all other nations are interested just the same as we are from a selfish standpoint, would it be a business proposition for us to yield unless we felt that it was necessary by reason of the letter of the law of the treaty? Mr. OUTERBRIDGE. I do not see that the other nations are interested from a selfish point of view at all in this matter. They are interested as a matter of principle in the contract. As I said before, they are not interested from a selfish point of view, except that this should constitute a discrimination. Senator BORAH. You remember Mr. Grey did not put his note upon that basis; he thought it was a distinct injury to the commerce of his country. Mr. ŎUTERBRIDGE. Then, he thought it was a discrimination. He took that interpretation. But they can not engage in our coastwise trade. There was one point mentioned out here; I did not want to bring it in, but since you have pressed me rather hard I will do so. That is this: There may lie a discrimination in this proposed repeal of tolls which has not yet become clearly apparent, and therefore I had not wanted to speak of it. But there are certain classes of commodities shipped by steamer which can be handled with extreme cheapness with proper apparatus. For instance, take coal in bulk and oils in bulk, and other bulk cargo, that by modern mechanical methods can be taken out of a ship with an extraordinary rapidity of speed and at a few cents a ton. It is entirely possible that if a great coal traflic develops between the mines in the northwest, between Alaska-if we have great coal mines there—that with proper appliances established at Panama it would necessitate the transshipment of that at that point before a foreign vessel could compete with an American vessel exempt from the tolls. The difference is 60 cents a ton on cargo. You can handle coal these days in and out of a vessel for a few cents a ton. The CHAIRMAN. For how many cents? Mr. OUTERBRIDGE. I have done it myself for 7 cents a ton. Mr. OUTERBRIDGE. No; out. I have discharged it at 74 cents a ton. I am quite sure it is done at very much less on the Lakes. The CHAIRMAN. And what will it cost to reload? Mr. OUTERBRIDGE. You can dump it in at chutes at 14 cents a ton. The CHAIRMAN. I understood Prof. Emory Johnson to say a few days since, speaking on this branch of the controversy, that it would probably cost about 50 cents a ton to unload and reload into another vessel? Mr. OUTERBRIDGE. That is ordinary merchandise, miscellaneous cargo. That is perfectly true. The average cost of stevedore in vessels of miscellaneous cargo is 20 to 25 cents a ton; but take big bulk cargo and have four hatches with overhead towers using Grant buckets, lifting 1 to 3 tons at a time, entirely automatic, operated by men in these towers-you can go and see it in many ports which I can name to you to-day where they are discharging 8,000 tons a day at a cost of under 74 cents a ton. Senator BRISTOW. Referring to this discrimination upon this reloading this transshipment-I desire to read from the Navigation Laws of the United States, from the volume I have here, page 222, the following: If any merchandise shall at any port in the United States on the northern, northeastern, or northwestern frontiers thereof be laden upon any vessel belonging wholly or in part to any subject of a foreign country and shall be taken thereby to a foreign port to be reladen or reshipped to any other port in the United States on such frontier, either by the same or any other vessel, foreign or American, with intent to evade the provisions relating to the transportation of merchandise from one port of the United States to another port of the United States in a vessel belonging wholly or in part to a subject of any foreign power, and the merchandise shall on its arrival at such lastnamed port be seized and forfeited to the United States and the vessel shall pay a tonnage duty of 50 cents per ton on her admeasurement. If there should be any effort to evade the law in regard to this coastwise trade, do you not think that the same statute which protects the present coast wise trade from foreign interference in that way could be utilized to protect Mr. OUTERBRIDGE. I have not studied that particular phase of this question sufficiently to want to permit myself to answer. I did not intend to interject that into this discussion at all to-day, but I can quite understand that in the minds of the other high contracting parties that that might appear as a possible potential force of discrimination. Senator BRISTOW. Could you not easily relieve the mind of the other contracting party by reading to him this statute? Mr. OUTERBRIDGE. I do not know. I can not analyze his psychology sufficiently to answer that. Senator PAGE. In your opinion is the coastwise shipping trade today a generally profitable business? Mr. OUTERBRIDGE. Undoubtedly. Senator PAGE. In case of the open canal you say that possibly the increase of business would be phenomenal and more than we now imagine. Do you think that there would be plenty of opportunity to build ships in our own ship yards to take care of that business? Mr. OUTERBRIDGE. I think there will be plenty of opportunity to build the ships, if people have the courage, and I think people will have the courage if they see a better determination of volume and class of tonnage. Senator PAGE. I asked you first if the coastwise trade was not profitable, and you said it is. Mr. OUTERBRIDGE. Very profitable. Senator PAGE. And because it is, I imagine those ships will be built to take care of all trade there is? Mr. OUTERBRIDGE. Yes; but there are a great many problems to determine in the matter of transporting freight by water and building ships, which have caused people to hesitate when the general proposition looks favorable. For instance, here is the canal, the enlarged area canal, which is now near reaching conclusion. There has been an offer, to my personal knowledge, going around the New York market, among shipping men for two years past, offering a tonnage of a million tons a year of oil to come from the Chamberlain mines to be delivered in the lower water harbors of New York for a long period of years, and no one has yet been found willing or ready to furnish the capital to construct the barges with a 10-year contract in front of them. Senator PAGE. What would be the ultimate destination of that freight? Mr. OUTERBRIDGE. The ultimate destination would be the Bethlehem Steel Works. Senator WALSH. I did not quite understand whether you felt that the Canadian transcontinental railroads shared in the apprehension |