A little later in that same statement we were told that unless we did this thing, which the rest of the world was represented as wishing us to do, that we could not negotiate any 'more peace treaties or any more other treaties. Our answer to that, gentlemen, is: Why do we wish to negotiate treaties which are nothing but a grievance? No difference is announced between a national treaty and a national agreement. What good are treaties if they are to be interpreted for us without protest of our own, without consent of ourselves, without consultation

Senator SIMMONS. Do you think we have any more right to interpret a treaty than the other party to the treaty has?

Mr. BALLARD. I was just going to say, what good was it to us to enter into a treaty, or into other treaties, if we are going to rely on the other party's interpretation instead of our own? Now, Senator, if you were asking us to put this matter to unbiased arbitrationSenator SIMMONS. Are you in favor of arbitration?

Mr. BALLARD. Yes, sir; and if it goes to arbitration-mark my word, sir-it will be decided in our favor.

Senator SIMMONS. The most of those who have opposed arbitration have put it upon the ground that they thought the arbitral tribunal would be hostile to us.

Mr. BALLARD. If it went to The Hague, Senator, that argument would be good, because we would go before a jury of biased judges; but I said an unbiased arbitration, and The Hague is not the only tribunal at the disposal of two nations who want to do right by each other in honor and in comity.

Senator SIMMONS. Then pending that arbitration you would continue your construction of the treaty, notwithtsanding the other side? Mr. BALLARD. Yes, sir.

Senator SIMMONS. In other words, as far as you were concerned, you would prejudge it and go on and do what the other party said was a violation, and you would do that before there was an arbitration?

Mr. BALLARD. So long as I were convinced in conscience that there was no violation of the treaty, and so long as I saw no disposition on the part of my fellow citizens opposed to my contention to submit to arbitration, yes.

The only specific-and I do not charge this to the administrationthe only specific statement of purpose, the only specific situation cited as a possible excuse or reason for the necessity of this course of action that I have read- there may be others, but this is the only one that my record shows-was that indicated on the floor of the House by the Senator from Illinois. He indicated to us that in the event of our failure to bow to the wishes and to the desires of England in this matter, we would plunge ourselves by that very fact into a cosmic cataclasm of nations which would involve a union of black and white and yellow races, massing together in defiance of all Jim Crow laws imposed by nature, a phalanx of German and Teuton and Gallic, mingling the strains of God Save the King with La Marseillaise and the Watch on the Rhine in utter defiance of all racial animosities that history has laid down for a thousand years. I have never seen that possibility as a reason denied by any recognized spokesman for the administration. It may be, perhaps, however, that the administration did not know that the acid test of fact would be applied to that hypothesis so early in the proceedings.

We are to-day confronting war with that nation, which war the gentleman from Illinois said was going to produce said cataclasın. The press of England stands with us and acclaims us in part, and a large part of that part of it which does not entirely agree with the stand that the President has taken, says he ought to go further and annex Mexico. The German press, and I note this morning in the Washington Post that one of the official organs of the German Governmentand an official organ in Germany, as you gentlemen know, means more than here stands where the English press stands on that question, and that theory is exploded; and it is the only thing in the semblance of reason that I have ever heard advanced in support of this policy. It is a mystery, yes. It may be a sacred mystery, but again I say mysteries belong to faith and not to politics, and not to administrations.

The contention was raised here this morning by some of the gentlemen of the committee with Mr. Porch, that the construction of the interoceanic canal could do nothing in the world to disguise or alter the fact that our coastwise charges in American bottoms, as they must be under the law, are three times or more higher than such freight would be if carried in foreign bottoms. I do not pretend that the absence of the Panama Canal with free tolls to American coastwise shipping is in any sense a fundamental reason for the disparity be tween our charges for coastwise traffic and what those charges would be if that traffic was carried in foreign bottoms.

Senator SIMMONS. Do you not think if the charges in our present coastwise traffic-I am not speaking of intercoastal traffic now, because the canal has not been opened say from New York to New Orleans, is three times as high as the charges in our foreign traffic, our over-sea traffic, do you not think that is an indication that the coastwise vessels, or vessels engaged in coastwise trade by reason of the monopoly that they enjoy under the law, are now in a position where they make an unconscionable profit, or charge an unconscionable rate?

Mr. BALLARD. Senator, I was approaching that

Senator SIMMONS. In other words, is there anything in the cost of the operation of a vessel from port to port and the operation of a vessel from coast to coast on the same ocean which would justify a charge on the part of our coastwise trade of three times as much as the charge made oversea?

Mr. BALLARD. Yes, and no. I was approaching that question when you proposed it, and if the Senator has no objection I will get to it in my own way in just a moment.

Senator SIMMONS. Elaborate it. I have not heard anybody yet that contended that the cost of transportation and operating a foreign vessel was more than 30 per cent more than the cost of constructing and operating an American vessel, and I was anxious to know what, according to your views, accounted for or justified this great difference of a charge of three times as much in one traffic as in the other traffic.

Mr. BALLARD. With the classification with regard to the percentage of 30 that you have stated there, you will not hear me make any such contention. The fundamental facts operating to put our coastwise traffic at this tremendous disparity with what other nations pay for their coastwise traffic and what we would pay if deep-sea rates

prevailed, such as those other nations charge for deep-sea traffic, practically are three, and we have all had an innumerable swarm of specific cases to indicate it. One was a fundamental difference in the cost of material that goes into ships in favor of the foreign builder against the American builder. The Atlantic Transport Co. not many years ago built two ships, the Maine and the Michigan, of the same type and not a thousand tons difference between them. The one that was built on the Clyde cost slightly over $600,000, and the one that was built in Pennsylvania cost $1,100,000, a raise of over 80 per cent. That difference is accounted for not altogether, but very considerably, in the fact, first, that wage conditions and wages themselves are more costly and higher in the American yards than they are in the British yards; but one other fundamental important factor rules there, that is, that they buy the material itself over there in a free market, whereas we buy it in a protected market. It is the whole theory and practice of this administration and its pledge and promise-both of this administration and of the Progressive minority-that the perpetuation and perfection of the free-trade policy it has set up and which it has inflicted on us in sugar in Louisiana is going to correct that disparity in favor of the foreigner, and unless it does our whole Democratic and Progressive theory of free trade or tariff for revenue only, or of reduced tariffs, is a mockery. That is one factor.

Senator SIMMONS. You have not answered the question I asked you. I am not disputing with you-I do not understand that anybody disputes with you the proposition that a foreign-built ship can be constructed and operated cheaper than an American-built ship, operated under the American flag and under our navigation laws. But the question I ask you is, Is the cost of operating the American vessel three times as great as the cost of operating the foreign vessel?

Mr. BALLARD. It is not, in my judgment; no.

Senator SIMMONS. Then if that is not so, that does not furnish a sufficient reason for the coastwise trade in this country charging three times as much for traffic as the overseas?

Mr. BALLARD. Certainly not, if the three-times factor is correctly stated.

Senator SIMMONS. I understood you to state it.

Mr. BALLARD. No; you stated it.

Senator SIMMONS. I understood you to state that it was three times as much, and I was taking you up on it.

Mr. BALLARD. I suppose we both stated it.

Senator SIMMONS. I have not stated it, because I know it is not the fact from my own standpoint.

Mr. BALLARD. I did not state it as a fact; I stated it as a report. It was stated on the floor this morning.

Senator SIMMONS. I say I think it is not a fact.

Mr. BALLARD. No; I do not think so either. I do not think the disparity is anything like that.

One factor entering into the legitimate disparity is the factor in the cost of material, and we are proposing to alter that and approach closer to the foreign builder. The other factor indicated this morning, the conditions of work, numbers, wages, the mess and so on, on American ships, are very much higher than on those foreign ships,

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but as against that comes this factor, the sailor is more or less of a peon, even in this country up to this time, and he is infinitely more so abroad than he is here, in Scandinavia, in Germany, and in England, among all the maritime nations, and I know, because I have lived with a lot of them in Norfolk. It is a fact, in neutralization of that, however, that the last 15 years have seen in England and in those other countries, with the rise of the great socialistic minorities therehave seen the most phenomenal impetuses, an overwhelming expansion in the labor movement, which in many cases surpasses that movement here, and the time is coming, as sure as you sit here, and it is not far off-when that commercial disparity against the American shipowner and favorable to the English shipowner is going to be corrected by the action of the British seamen's agitators themselves.

The third factor, increasing the cost of coastwise shipments in this country, is the fact that a very large majority of our coastwise ships are owned by railroads, which are more interested in maintaining their railroad rates than they are in reducing water rates. And if they are not owned by railroads, in many and many another case they are owned by the same aggregations of capital that do own railroads. This Government has set itself to the policing and the redress of that situation, and if we are to sit down here and confess that we are always to be at a disparity in building a ship, in operating a ship, or in policing the rating of ship cargoes with other nations, then, my friends, the theory on which our whole Interstate Commerce Commission is built is a fraud. We are looking for parity in the future, just as we are looking to water transportation interiorly in this country for the future. We are saying to you in respect to this Panama Canal, "Gentlemen, we do not expect it to work wonders; we do not expect it to correct overnight existing difficulties and embarrassments, fundamental conditions that are the results of years of evolution and can be changed in no other way than by years of correction," but we do ask you, "do not put a new bar and a new shackle on the development of a merchant marine by the removal of the disparities that are under process of removal to-day." That would be our answer to those considerations raised to that aspect of the case.

Senator SIMMONS. What are you talking about? Our merchant marine?

Mr. BALLARD. I am talking about our merchant marine; yes, sir. I do not agree with Mr. Porch that we have the right, under the circumstances in which the Hay-Pauncefote treaty and the treaty that went before it were framed, to exempt our deep-sea ships unless we exempt other deep-sea ships.

it

Senator SIMMONS. Suppose our coastwise trading ships are charged two or three times as much now as our overseas trade; suppose were a fact, as testified to by Dr. Emory Johnson the other day, who has investigated this, that many of the coastwise lines that he spoke of are now paying dividends of from 6 to 7 per cent, and I think he went as high as 8 per cent (I am not sure about the amount), and carrying annually to surplus a profit two or three times that amount; supposing as the result of digging this canal these coastwise vessels can get from coast to coast for $2 or $3 per ton (it has been put higher than that--as high as $4 or $5 a ton), would you not say that with

the monopoly which they have under our laws that in that condition. of things they were not in a position to come and ask any further favors, and that they could live whether they had to pay tolls or did not have to pay tolls, and still make a very good profit? Indeed, that they could maintain upon the basis of their present rates, before the shortening of the distance by the opening of the canal reduce the cost of operation $2 or $3 a ton upon the present basis of rates, instead of having a profit of 6 or 8 per cent and three or four times as much every year to go into surplus, they might have a profit of probably 15 or 20 per cent, and also a large fund to go to surplus? In that condition of things, do you think that requiring them to pay a toll of 60 cents a ton, for that is about what it is a weight ton, 60 cents a ton with all of those advantages, that they would be put in any very bad economic situation?

Mr. BALLARD. Senator, my information is

Senator SIMMONS. Especially in comparison with our foreign trade, foreign ships that have to pay this toll?

Mr. BALLARD. My information is that the proportion of existing coasting steamship lines which would be eligible to use the Panama Canal under the act would be very, very small by comparison with the proportion of existing lines which would not be permitted to use the canal. In other words, the railroad-owned lines and the trust-owned lines.

Senator SIMMONS. Do you think because the railroad-owned lines and the railroad-owned vessels are not permitted to go through the canal that therefore those same vessels will not go through the canal as the property of somebody else who will buy them from the railroads when they are forced to get rid of them? In other words, what do you think if you say to these railroads: "You shall not own these ships any longer, or shall not carry them through the canal?"

Mr. BALLARD. As a matter of comity you took about three minutes to ask your question, and I can not answer it in a moment. Senator SIMMONS. Take as long as you please.

Mr. BALLARD. The percentage of our shipping that would go through the canal now is insignificant by comparison with the percentage that could not go through it under present conditions of ownership, and what you have said is absolutely true. Those ships would pass to other control, and if they did not pass to independent control that would be a fault in the administration of the police business of this Government, and we should like to see them pass to other control and should like to see the available coastwise fleet from East to West increased by their number; and we know if they do go into independent control and if others are built under independent control and operated through that slit across the continent with the utmost possible freedom and the fewest possible impediments of tolls or other taxes, that just so long as they are independent they are going to get such classes of freight as they can get from the railroads by underbidding the railroads for it, and it is precisely that process of underbidding that makes wealth for the man who is interested in the merchandise of transportation-lowers the cost of living to the people who use that merchandise, and will upbuild New Orleans as a port by virtue of the multiplication there of those ships about which you are talking that carry that merchandise. That is my answer to that.