receiving at least as much as we were getting? A yes or no would have entirely covered that, but of course you had a right to go on and make any statement you desired in connection with the matter. But I will now repeat that question.

Mr. BONAPARTE. I will answer it, Senator, with pleasure, that in my opinion Mr. Choate undoubtedly did think we were making a good bargain at that time.

Senator THORNTON. I have no further questions.

Senator SIMMONS. Mr. Chairman, did I understand you awhile ago to put in the record the Hay-Herran treaty?

The CHAIRMAN. Yes.

Senator SIMMONS. Right along with that I desire to have read in the record the treaty between the United States and Panama. The CHAIRMAN. I. think that is in already.

Senator SIMMONS. I will show you the reason why I desire it in this connection.

The CHAIRMAN. I offered it some time ago, I think.

Senator SIMMONS. Then in addition to that I wish also to incorporate the treaty made by Mr. Root, known as the Root-Cortez treaty with Colombia, which treaty was never ratified.

The CHAIRMAN. To avoid any misapprehension, this is the request made by Senator Brandegee: He asked to have the two HayPauncefote treaties, the Clayton-Bulwer treaty, the Colombia and New Granada treaty of 1846, the Hay-Bunau-Varilla treaty with Panama that is true; it did not embrace the Colombia treaty of

1909.

Senator SIMMONS. You were asking for that at the request of Senator Brandegee. I am asking this to be put in at the request of another Senator.

Then I want the treaty between the Republic of Panama and Colombia, signed by Elihu Root and C. C. Arosemena. There was one negotiated, but I think it was never consummated. Those two treaties are in a public document, but I want those inserted in the record along with the other treaties.

The CHAIRMAN. Very well; they will be printed.

Senator SIMMONS. Then I want to ask in addition to that that the clerk read now the correspondence between Mr. Root, then Secretary of State, and Mr. Reid, then our ambassador to the Court of St. James, Great Britain, giving the reasons in favor of the treaty with Colombia, and the reasons why he asked the consent of Great Britain to the treaty.

The CHAIRMAN. As recess time has arrived, I will ask, Senator, that we postpone that until after the recess.

Senator SIMMONS. Very well.

(Thereupon, at 1.20 o'clock p. m., a recess was taken until 2 o'clock p. m.)

AFTER RECESS.

The committee met at 2 o'clock p. m.,

after recess.

STATEMENT OF HON. WILLIAM E. HUMPHREY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WASHINGTON.

The CHAIRMAN. We will hear Mr. Humphrey of Washington.

Mr. HUMPHREY. Mr. Chairman, and gentlemen of the committee, I thank you for this opportunity. I come here with no prepared speech, nor with any intention of discussing this matter generally, but I want to call the attention of the committee to conditions in the Northwest, and first, in order that the committee may understand the situation, I ask attention to this map just for a moment to get the relation of the boundaries and the cities of Seattle, Takoma, and Vancouver. Vancouver, British Columbia, is situated here findicating on map], and Seattle is here, and Takoma here. All the vessels entering this portion of the country, going either to Vancouver or down to Puget Sound, come into the Straits of Juan de Fuca, and at this common point here it is almost exactly the same distance to Vancouver that it is to Seattle. That is all I want to get from the

map.

In addition to that fact, the facilities of Vancouver and Seattle are practically the same. The Great Northern Railroad has its terminals at Vancouver. The Northern Pacific, the Canadian Pacific, and the Milwaukee have their terminals at Seattle, so that there is as much. inducement, so far as facilities are concerned, to go to one place as to the other. There is open deep water for any vessel that floats at either place. And what I say as to Seattle applies also to other cities on Puget Sound.

With that statement in mind, I wish to call the committee's attention for a few minutes to what we think will be the result if this bill passes; and I may say to the committee in the way of a text, that I believe now, and have believed for several years, that unless American ships in the coastwise trade are permitted to pass through the Panama Canal without the payment of tolls, that it would be better for the State of Washington, and for the Pacific Northwest generally, if the canal had never been constructed, and I am going to tell you some of the reasons why I think so.

Take it, for instance, in regard to lumber. The gentleman who was talking this morning called your attention to some of the facts in reference to lumber. I have had a lumber man make a calculation in regard to what the effect would be and he figures that the difference on 1,000 feet of lumber, if carried by a steamer, would run from $1.47 to $1.56 per 1,000. That is where the ships lead both above and below deck cargoes. By sailing ship it would amount to $1.33 per 1,000.

Since I have been in this room I have heard it stated that it would make no difference about applying these tolls, because it would not be a burden upon commerce; that it would be assumed by the ship. Suppose that one of you gentlemen now is conducting a sawmill in Puget Sound. You want a vessel of 5,000 tons, to charter it to carry a cargo of lumber from Puget Sound to New York. That would

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amount to something over $6,000 that the vessel owner would have to pay as she went through the canal, and do you tell me that when you have got to make your charter price with that vessel owner that he does not take into consideration the fact that he has got to pay $6,000 when he passes through the canal? It seems to me that it is too absurd for argument to say that in the case of cargo vessels at least that the ship would pay the tolls.

The CHAIRMAN. Might I ask the Congressman at that point, how would that one item of expense, aggregating, as you suggest, perhaps $6,000, compare with the other items of expense included in the operation of the ship from the eastern port to a port on the Pacific side of the coast?

Mr. HUMPHREY. Mr. Chairman, I am not familiar with the details of the operation of those vessels. I have never had occasion to make a calculation as to what it would be.

The CHAIRMAN. I am wondering myself, and that is why I ask the question whether there is any other single item of expense as large as that item of $6,000.

Mr. HUMPHREY. There would not be, unless it would be fuel, which might be that large on these cargo steamers. But the point that I wanted to make particularly was that that difference of $1.47 to $1.56 would be a very large profit for the lumber manufacturer on Puget Sound; if he could be assured of $1 per 1,000, he would be pretty well satisfied.

Senator BRISTOw. Mr. Humphrey, would that $6,000 profit on the cargo of lumber be regarded as a good profit to the mill if it netted $6,000 on the cargo when it disposed of it?

Mr. HUMPHREY. If it could net $5,000 on a cargo that would pay $6,000 on going through the canal, they would consider that a good profit.

Senator BRISTOW. Then the tolls would be more than the profits on the cargo the lumberman would expect to get?

Mr. HUMPHREY. It would be more than they would be satisfied with. A lumberman in my country to-day would be very happy indeed if he could get 50 cents net profit at the mills on his lumber.

It is not necessary for me to call the committee's attention to the advantage that the lumbermen in British Columbia would have, who could employ cheap vessels, over the manufacturer on Puget Sound.

You have undoubtedly had that called to your mind many times. We know the foreign ships with their cheap construction and with their cheap Chinese crews can carry it for very much less than the vessels in the American coastwise trade.

But there is one matter I wish to emphasize to the committee which perhaps has not been brought to your attention. Not only would that be true of what we might have to sell, what we might wish to send out from Puget Sound, but I call your attention to this in regard to foreign steamships coming into that country, that you can take a vessel and load it at New York, for instance, we will say, with steel or any other cargo of American manufacture; go through the Panama Canal; come up to Vancouver; unload it; place it on the railroad, and send it back into the United States without the payment of one cent of duty. The reverse is true; so here is the situation if this bill passes, that you take it in Spokane, in Montana, and all that great country back there, they are going to send their products

through Vancouver to get the advantages of these cheap ships which we at Seattle and in that Puget Sound country can not get. We look upon this as absolutely vital to Seattle and Tacoma as future commercial cities.

Senator BRISTOw. Let me understand. Can you load a train of goods at Spokane destined to Vancouver and there load it- that is, its ultimate destination is New York?

Mr. HUMPHREY. Yes, sir.

Senator BRISTOW. To Vancouver, and there load it into a foreign vessel, and let that vessel unload it at New York?

Mr. HUMPHREY. Absolutely.

Senator BRISTOW. Does not that interfere with the navigation laws?

Mr. HUMPHREY. No, sir; it does not. And that is one point that I have especially wanted to call to the attention of the committee. That has been decided in two instances, in two cases that I recall. It was first decided in what is known as the Keg of Nails case, where a German ship took a cargo of nails from this country, I think from Philadelphia, took it off the ship there and put it on another vessel and sent it around to San Francisco. There was there they used two foreign vessels, and they held that that was not a violation. of our navigation laws. But the exact question came when the Southern Pacific Railroad brought a cargo of steel rails, I think they were taken from Philadelphia, at any rate from some American port they were taken down to Mexico and placed on the railroad there and brought back up into Arizona and they held that was not in violation of our navigation laws. There are other cases, but I recall those two, so that there is no question about it. I had the matter up before the Committee on Ways and Means when they were considering the tariff law. So you see we on the Pacific coast, not only are at a disadvantage by the cheap foreign vessels coming into competition by coming into our ports, but we are under an additional handicap that they can practically evade the navigation laws. Senator THOMAS. Do they have a line from Spokane to Vancouver? Mr. HUMPHREY. I do not think they have a line, but rather they have a traffic agreement with Mr. Hill; he has a line direct from Spokane to Vancouver.

Senator THOMAS. Then, that would require the land transportation from Spokane to the British port?

Mr. HUMPHREY. Yes.

Senator THOMAS. That it be carried both by American and Canadian railways in combination?

Mr. HUMPHREY. Yes; but the Great Northern could do it and the Northern Pacific could do it, but in either case where you can find a railroad and go into foreign territory and there take a foreign ship, you can come right back to American territory.

Senator THOMAS. You say it is about the same distance from Spokane to Vancouver as from Spokane to Seattle?

Mr. HUMPHREY. No; I did not intend to say that. I meant freight rates were the same. There is a very great difference in the distance. Senator BRISTOW. But the freight rates are the same?

Mr. HUMPHREY. The freight rates are practically the same from Vancouver to all those points.

Senator THOMAS. Of course, that equalizes the distance?

Mr. HUMPHREY. My judgment is, without looking into it, that the freight rate from Vancouver to Spokane or from Seattle to Spokane are identical.

I suppose that during the last six or seven years I have been as closely related to the shipping industries of this country as probably any man in public life, and when the matter came up in regard to the Panama Canal tolls question not one single shipping man, either then or since, engaged in coastwise shipping has ever approached me or has ever made any statement that it would be an advantage to him as a shipper in the coastwise trade to have the free passage of his ships through the canal, and if he had done so I would have been very much surprised, and would have thought he was either stupid or else was trying to deceive me. I will tell you why. If you were giving this preference through this canal to ships in the foreign trade, I can see then where it would be an advantage; it would be a discrimination in their favor, and it would, in that instance, be a subsidy to the advantage of American ships going through the canal, and I say, as one man, I should like to see it done; but when you take the coastwise trade, and the advantage that you give to one ship you give to another, and no outside competitor can come within that sacred circle, and when one competitor has exactly the same advantage as the other, I can not see how any of them is going to profit by it. To take an illustration. Suppose that two of you gentlemen owned all the drays in this city and that nobody else except you two could come into that business under any circumstances, and that the city would say to you: "We will charge you 10 cents, I will say, or $1 a year for the use of the streets." Each one of you would bear exactly the same burden in proportion to the number of drays that you owned, and I would be very much surprised in the exemplification of human nature you would display if that charge did not appear in the rates that you charged.

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I know these shipping men throughout this country. I think I have come in contact with them as much as any man. They are a splendid set of fellows; they are about like the average business man, but if they have to pay tolls going through the Panama Canal, and they do not show that charge in the freights, you have very much more confidence in them than I have. What is the reason that these men, if they have to pay a burden, they have to bear the tolls, that they are not going to charge it up to the patrons, and eventually it will go back to the consumer and become a burden upon commerce? I heard one statement made at the table here yesterday when I was sitting here, that these tolls were so small that it would be no burden. upon commerce. If 40 cents is not a burden upon commerce, is $1! If $1 is not a burden would $10 be a burden? Just where would you reach the place where the shipowner would begin to push it over onto the consumer? It seems to me that to argue that a tax or a toll, however small, is not a burden upon commerce is to argue that a tax is not a burden upon industry, and I think that there is no question about it when you stop to consider for a moment that you can block the Panama Canal as effectually by a toll as you could by granite walls. If you put it high enough you will stop it entirely.

I know that it is argued that this is a subsidy. I am one man who has never apologized or stuttered in speaking the word "subsidy." Personally I am a believer in it. Personally I do not think we shall